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Goldman Sachs, JP Morgan blow estimates with stellar results

The Goldman Sachs Group, Inc. (NYSE:GS) and JPMorgan Chase & Co. (NYSE:JPM) have bot blown estimates with their latest quarterly results.

Goldman Sachs posted a 102% surge in record net revenues to US$17.7bn for the quarter to March 31, while pre-tax earnings rocketed 518% to US$8.3bn.

READ: Goldman Sachs to open office in Birmingham later this year

The increase compared with the first quarter of 2020 reflected higher net revenues across all segments, including significant increases in Asset Management, Global Markets and Investment Banking, the bank said.

Equity underwriting was buoyed by strong IPO activity while debt underwriting benefitted from higher net revenues from leveraged finance and asset-backed activity.

Financial advisory revenues were reflected a significant increase in completed mergers and acquisitions transactions.

Earnings per share (EPS) jumped to US$18.60 from US$3.11 in 2020, beating forecasts of US$10.22, Reuters reported.

Operating expenses, however, climbed 46% to US$9.4bn due to significantly higher compensation and benefits expenses following strong performance. Transaction-based and tech spend were also higher.

On Wednesday, the board declared a dividend of US$1.25 per common share to be paid in June.

Meanwhile, JP Morgan said net revenue was up 14% to US$33.1bn, driven by higher CIB Markets revenue, higher Investment Banking fees, and no markdowns or losses in Credit Adjustments.

EPS came in at US$4.50 from US$0.78 in March 2020, compared to estimates of US$3.10.

Net income zoomed up 399% to US$14.3bn, mostly thanks to credit reserve releases of US$5.2bn compared to credit reserve builds of US$6.8bn in the first quarter of 2020.

Chairman and chief executive Jamie Dimon said that the bank has benefitted from a rapidly improving economy, which has potential to have “extremely robust, multi-year growth” thanks to government measures and “euphoria around the potential end of the pandemic”.

Goldman Sachs rose 3% to US$338.22 and JP Morgan dipped 1% to US$152.81 on Wednesday at open.

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