Goldman Sachs Delivers in First Quarter

Image Source: Goldman Sachs

By Brian Nelson, CFA

On April 15, Goldman Sachs (GS) reported better-than-expected first quarter 2024 results that showed a nice beat on both the top and bottom lines. Net revenue came in at $14.21 billion (consensus was at $12.9 billion) for the first quarter of 2024, roughly 16% higher than the mark achieved in the first quarter of last year. Goldman Sachs experienced higher net revenues across all of its segments. On an annualized basis, its annualized ROE came in at 14.8% in the quarter and its annualized ROTE came in at 15.9%. Goldman Sachs’ diluted earnings per common share was $11.58 (consensus was $8.68 per share) during the first quarter of the year compared with $8.79 for the first quarter of 2023.

The company’s ‘Global Banking & Markets’ division experienced a 15% year-over-year increase in revenue thanks in part to a 32% increase in investment banking fees due to strength in debt underwriting, an increase in mergers and acquisition activity, as well as strength in equity underwriting. Goldman Sachs also experienced strength in its “Fixed Income, Currency, and Commodities (FICC) division, where net revenue increased 10% from the same period last year thanks to strength in mortgages and structured lending. Net revenue in its “Equities” division advanced 10%. The firm’s ‘Asset & Wealth Management’ experienced 18% revenue growth due to strength in private banking and lending. Its ‘Platform Solutions’ revenue advanced 24% on a year-over-year basis. 

During the quarter, Goldman Sachs returned $2.53 billion of capital to common shareholders, breaking down into $1.5 billion in share buybacks and the balance from dividends. The company pays a quarterly dividend of $2.75, which equates to a forward estimated dividend yield of ~2.7% at the time of this writing. All things considered, Goldman Sachs put up solid first-quarter 2024 results across all lines of its business, revealing that capital markets activity remains very healthy, even in the face of elevated interest rates. Goldman Sachs’ book value per share was $321.10 at the end of the first quarter, revealing that shares are trading at 1.25x book at the time of this writing.