Banking & Finance

Goldman Sachs Earnings Lives Up to Golden Slacks Nickname

Goldman Sachs Group Inc. (NYSE: GS) has reported its first-quarter earnings for 2015, and it looks as though the firm is living up to the name Golden Slacks. Net revenue was $10.62 billion, and the net earnings of $2.84 billion generated an earnings per share (EPS) of $5.94. Thomson Reuters was calling for $4.26 EPS and $9.35 billion in revenues.

This EPS figure is up from $4.02 for the first quarter of 2014, and it compares to $4.38 for the fourth quarter of 2014. Another milestone was that the revenue figure was the highest quarterly result in four years.

The Goldman Sachs board of directors also increased its quarterly dividend to $0.65 per common share from $0.60 per common share. That new rate will be paid on June 29, 2015 to holders of record on June 1, 2015.

Book value per common share increased $5.38 during the quarter to $168.39, the largest quarterly increase in over five years. Operating expenses were $6.68 billion, a gain of 6% versus the first quarter of 2014, and some 49% higher than the fourth quarter of 2014 due to bonus season.

Other details were as follows:

  • Annualized return on average common shareholders’ equity (ROE) was 14.7%.
  • Common Equity Tier 1 ratio with the standardized approach was 11.4% and the Basel III Advanced approach was 12.6%.
  • Global core liquid assets were $175 billion.
  • Investment Banking produced net revenues of $1.91 billion (highest since 2007).
  • Institutional Client Services net revenues of $5.46 billion (highest quarterly performance by its equities client execution since 2010).
  • Net revenues in Investing & Lending were $1.67 billion for the first quarter of 2015, 9% higher than both the first quarter of 2014 and the fourth quarter of 2014.
  • Net revenues in Investment Management were $1.58 billion (mostly unchanged).

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Our own bullish and bearish review of Goldman Sachs has already been passed up, now that shares went above $200.

Goldman Sachs closed at $201.10 on Wednesday, and shares were indicated up 0.35 at $201.75 ahead of Thursday’s opening bell. The stock has traded in a range of $153.71 to $202.14 over the past 52-week period, and it has a consensus analyst price target of $198.36.