Goldman Sachs reported first-quarter results that beat significantly on both the top and bottom line as the bank’s traders took advantage of a volatile stock market, posting the highest equities trading revenue in three years.
Here’s what the bank reported compared to what analysts polled by Thomson Reuters were expecting:
— Revenues of $10.04 billion versus expectations of $8.74 billion.
— Earnings per share of $6.95 versus expectations of $5.58.
Goldman also raised its quarterly dividend 5 cents to 80 cents per common share.
The bank’s CEO Lloyd Blankfein will be interviewed on CNBC Wednesday morning, at 8:30 a.m. ET.
Revenue from equities trading surged 38 percent to $2.31 billion, trouncing the $1.92 billion consensus analyst estimate from FactSet. The bank pointed to higher fees, high market volatility and more client activity compared to the last quarter of 2017 as reasons for the better results.
The S&P 500 fell into correction territory in February on fears over rising interest rates. The stock market has remained volatile since then as Wall Street weighs a brewing trade battle between the U.S. and China.
The bank reported fixed income, currencies, and commodities trading revenues of $2.07 billion, which was slightly below the $2.13 billion consensus analyst estimate from FactSet. Goldman said lower net revenues in interest rate products and mortgages affected results. Still, the figure marked a 23 percent increase from a year earlier and was also the highest quarterly result in three years.
The bank reported a 34 percent decline in trading revenue in the fourth quarter, raising pressure for Goldman to deliver in the first quarter, which it largely did. In the past, the premiere Wall Street bank has lagged its peers in trading.
“Solid performance across our businesses produced strong returns in the first quarter,” Goldman Sachs CEO Lloyd Blankfein said in a statement. “We are well positioned to serve our clients as the global economy continues to show strength and central banks unwind certain aspects of policy stimulus.”
Shares of Goldman rose more than 1 percent before falling 1.2 percent, and were trading near $254 as of 10:33 a.m. ET Tuesday.
Revenues from investing and lending rose 43 percent to $2.09 billion, beating the $1.46 billion consensus analyst estimate from FactSet. On a quarterly basis, that number rose 26 percent. Higher net revenues from initial public offerings also helped boost underwriting revenues 27 percent to $1.21 billion.
On the earnings call, Goldman’s Chief Financial Officer Martin Chavez said the year on year increases were the result of “a lot of drivers” including central bank policy, not just volatility.
“The environment lined up well for our franchise,” Chavez said, adding that performance was strong across across geographies and product lines. “Bottom line, the franchise does well when clients are active.”