Goldman Sachs Delivers on Earnings and Book Value Growth

April 17, 2014 by Jon C. Ogg

Goldman Sachs Group Inc. (NYSE: GS) is still a new Dow Jones Industrial Average component, and now the bulge bracket investment banking firm — and bank holding company without any retail banking operations — is out with its first-quarter earnings for 2014.

Earnings came in at $4.02 per share, and revenues were $9.33 billion. Thomson Reuters had a consensus of $3.45 in earnings per share and a consensus of $8.7 billion in revenues. While the numbers came in above expectations, they compare to earnings of $4.29 per share and revenue of $10.09 billion in the same March quarter a year ago. Its total capital was $244.73 billion and total assets were $916 billion.

Operating expenses were $6.31 billion, 6% lower than the first quarter of 2013 and 21% higher than the fourth quarter of 2013.

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Goldman Sachs had a quarter end book value of $154.69 per share and a tangible book value per share of $145.04, versus a $157.22 close. Goldman ended the quarter with a Basel Tier 1 capital ratio of 16.3%, as well as a Basel Tier 1 common equity ratio of 14.6%. Segment revenue was as follows:

  • Institutional Client Services: $4.45 billion, or 13% lower than the first quarter of 2013 and 31% higher than the fourth quarter of 2013
  • Investment Banking: $1.78 billion, the best since 2007
  • Equities Rev: $1.6 billion
  • Investment Management: $1.57 billion, and assets under supervision increased to a record $1.08 trillion — and 20% higher than the first quarter of 2013 and 2% lower than the fourth quarter of 2013
  • Investing and Lending: $1.53 billion, or 26% lower than both the first quarter of 2013 and the fourth quarter of 2013
  • FICC: $2.85 billion

Goldman Sachs closed up 1.5% at $157.22 on Wednesday, against a 52-week range of $137.29 to $181.13. Its consensus analyst target price is $176.87, and shares were indicated up close to 2% at $160.25 in early trading Thursday.