Goldman Sachs shares leap as merger rebound powers Q1 earnings beat

A big M&A rebound helped Goldman Sachs top Wall Street earnings forecasts.

Apr 15, 2024 - 18:30

0 12

Goldman Sachs shares leap as merger rebound powers Q1 earnings beat

Goldman Sachs Group (GS) posted stronger-than-expected first quarter earnings Monday as a rebound in merger deals supported revenue gains for its biggest division, sending the investment bank's shares higher in early trading.

Goldman, the fifth-largest U.S. bank and one of the most influential investment houses on Wall Street, reported profit of $4.13 billion, or $11.58 a share, up 17% from the year-earlier period and well ahead of the Wall Street consensus forecast of $8.56 per share.

Group revenue rose 12% to $14.21 billion, topping analysts' forecasts of a $12.92 billion total. The group's Global Banking & Markets division, which includes fixed-income trading as well as its mergers-and-acquisitions units, saw revenue rise 15% to $9.73 billion.

Global M&A activity rebounded firmly over the first quarter, with overall deal volumes rising 30% from a year earlier to just over $755 billion, according to LSEG data.

Shareholder proxy groups are urging Goldman Sachs to separate the roles of chairman and CEO, currently held by David Solomon, into two distinct positions.
Taylor Hill/Getty Images

“Our first quarter results reflect the strength of our world-class and interconnected franchises and the earnings power of Goldman Sachs," said CEO David Solomon. "We continue to execute on our strategy, focusing on our core strengths to serve our clients and deliver for our shareholders.”

More Wall Street Analysts:

Goldman Sachs shares were marked 3.8% higher in premarket trading immediately following the earnings release to indicate an opening bell price of $404.33 each, a move would nudge the bank into positive territory for the year.

Last week, JP Morgan Chase (JPM) posted stronger-than-expected first quarter earnings but noted a quarter-on-quarter decline in one of its key profit metrics.

The bank said net interest income rose 11% to $23.2 billion, thanks in part to the higher interest rate environment and a pullback in bets that the Federal Reserve will begin cutting rates later this spring.

JP Morgan did note, however, that net interest income was down 4% on a sequential basis, thanks to what it called "margin compression and lower deposit balances." But the bank estimated it would rise to just under $90 billion for the year, a tally that will likely top its overall expenses target.

Original Post