• Monday, May 20, 2024
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BusinessDay

Goldman profit beats estimates on investment-banking gain

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 Goldman Sachs Group Incorporated, the world’s most profitable securities firm before the financial crisis, reported earnings that topped analysts’ estimates on a 63 percent gain in revenue from underwriting stocks and bonds.

Record debt-underwriting revenue and cost cuts helped Chief Executive Officer Lloyd C. Blankfein, increase return on equity to 12.4 percent from 12.2 percent a year earlier. Blankfein, 58, has sought to boost returns by cutting $1.9 billion in expenses and benefiting as trading volume increases and some competitors exit business lines.

First-quarter net income rose 7 percent to $2.26 billion from $2.11 billion a year earlier, the New York-based company said Tuesday in a statement. That was higher than all 24 analysts’ estimates in a Bloomberg survey.

“It was a pretty good quarter from a capital-markets perspective,” Keith Davis, an analyst at Farr, Miller & Washington LLC, which manages about $890 million, including shares of Goldman Sachs, said before the results were released.

Goldman Sachs dropped to $146.30 in New York trading at 8:19 a.m. from $146.46 yesterday. The stock gained 15 percent this year through yesterday after advancing 41 percent in 2012. The shares reached $193.60 on Oct. 14, 2009.

Revenue rose 1 percent to $10.1 billion. Compensation, the firm’s biggest expense, fell 1 percent to $4.34 billion and amounted to 43 percent of revenue for the quarter, down from 44 percent a year earlier.