NEW YORK – Earnings: Goldman Sachs
Strong revenue in investment banking, fixed income trading and asset management helped Goldman Sachs Group Inc.'s (GS) first-quarter profits rise 62 percent from a year ago, the company said Tuesday. The results far outstripped Wall Street's forecasts, and Goldman shares climbed nearly 4 percent in early trading.
For the quarter ending Feb. 24, Goldman Sachs earned $2.45 billion, or $5.08 per share, compared to $1.51 billion, or $2.94 per share, in the first quarter of 2005.
Revenue came to a record $10.34 billion, up 61 percent from $6.41 billion from a year ago and 42 percent higher than the previous quarterly record.
Analysts surveyed by Thomson Financial had expected the company to earn $3.29 per share on revenues of $7.19 billion.
Shares of Goldman Sachs jumped $5.43, or 3.9 percent, to $146.15, in early trading on the New York Stock Exchange, just shy of its 52-week high of $147.48 set March 3.
Goldman Sachs saw its second-best quarter ever in investment banking, with revenue up 68 percent to $1.47 billion from a year ago. The Wall Street firm ranked first in worldwide completed acquisitions, initial public stock offerings and secondary stock offerings for the year to date, the company said.
The company's backlog of pending stock offerings and M&A deals dwindled during the quarter, however.
Trading and principal investment income rose 61 percent to $6.69 billion. Of that, $3.74 billion came from fixed income, commodities and currency trading, a new record for that division. Equity trading also set a new record with revenue of $2.45 billion, up 58 percent from a year ago.
Revenue in the company's asset management division more than to a record $1.55 billion, 89 percent higher than the previous record.
Goldman's expenses rose 56 percent to $6.65 billion, mostly due to the higher commissions the company's employees earned in generating the record revenue. The company said it also incurred higher equity and fixed-income trading fees.
The company's board of directors increased its quarterly dividend by 40 percent to 35 cents per share, payable on May 25 to shareholders of record as of April 25.