With JPMorgan’s results on the books as a beat with an asterisk (Dimon struck a somewhat cautious tone on loan demand and the sustainability of the US housing boom), Goldman stepped up to the plate.
Tentacles bulging like a juiced-up Mark McGwire, the Mighty Squid delivered revenue of $17.7 billion, doubling Q1 2020’s total and making a mockery of consensus. The range was $10.45 billion to $14.28 billion. EPS of $18.60 looked like a freakish beat. FactSet was $10.22, with a range of $7.69 to $12.65.
“Our businesses remain very well positioned,” David Solomon remarked.
Duly noted. FICC revenue was $3.89 billion. Consensus was looking for $2.92 billion. In equities, Goldman ran up $3.69 billion in revenue, easily better than the $2.43 billion the market wanted. Folks were tossing around references to the Robinhood / WallStreetBets mania and other manifestations of froth that characterized the first quarter. Goldman said average Prime balances hit at a record.
Total markets revenue of $7.58 billion was up 47% YoY and 78% sequentially. It exceeded consensus by more than $2 billion. Market-making conditions were “improved,” the bank said. Client activity was robust.
IB revenue of $3.77 billion rose 73% YoY and 44% QoQ. Consensus there wasn’t even close. The market was looking for… I don’t know, a much smaller number. What difference does it make? Debt underwriting rose 67% from Q4 and 51% YoY. The figures for equity underwriting were 41% and 315%. Goldman cited IPOs, leveraged finance and asset-backed activity.
In asset management (which used to be Investment Management before Goldman revamped how it breaks down results by division), revenues were higher. Amusingly, net gains on Goldman’s equity investments were $3.12 billion in Q1. $2.78 billion of that came on private investments.
Revenue in consumer and wealth management, which is home to Marcus and Goldman’s card venture with Apple, rose 16% YoY.
In consumer specifically (which is small for Goldman, but growing), revenues were $371 million. Small, yes. But, as I’m fond of putting it, “they’re coming for you.” Consumer deposits rose beyond $100 billion in Q1.
Let me just sum this up for you:
- Net revenues: Record
- Net earnings: Record
- IB revenues: Record
- Equity underwriting: Record
- Asset management revenues: Record
- Consumer and wealth management revenues: Record
- Assets under supervision firmwide: Record
- Buybacks in Q1: $2.7 billion
- Rank in global M&A: #1
Goldman’s allowance for credit losses was $4.24 billion as of quarter-end.
Commenting a bit further in the perfunctory, three-sentence introduction to the easy-to-read results, Solomon said he’s “proud of our people… and pleased that our client-centric strategy continues to drive additional value for our shareholders.”
Jamie can write poignant letters but at Goldman the DJ delivers a beat shareholders can dance to
The Mighty Squid, indeed.