Goldman Sachs Group has reported a higher-than-expected 19% increase in net earnings for the first quarter of the 2026 financial year (Q1 FY26), but its stock price fell due to weakness in its fixed income, currencies and commodities (FICC) division.
The global investment bank said net earnings rose to $5.63 billion (A$7.93 billion) in the three months to 31 March 2026 from $4.74 billion in the previous corresponding period (pcp).
Diluted earnings per share (EPS) jumped 24% to 17.55 cents on revenue which increased 14% to $17.23 billion.
“Goldman Sachs delivered very strong performance for our shareholders this quarter, even as market conditions became more volatile,” Chairman and Chief Executive Officer David Solomon said in a press release.
“The geopolitical landscape remains very complex – so disciplined risk management must remain core to how we operate.”
Revenue and EPS exceeded analysts' average estimates of $16.97 billion and 16.49 cents, respectively, according to data compiled by LSEG.
Net revenue in the Global Banking & Markets division rose 19% to $12.74 billion in Q1, including a 48% leap in investment banking fees and higher net revenue from equity and debt underwriting.
However, net revenues in FICC fell 10% to $4.01 billion because of lower net revenues in FICC intermediation, due to significantly lower net revenues in interest rate products and mortgages and lower net revenues in credit products, partially offset by significantly higher net revenues in commodities and currencies.
"The stock is weak due to the disappointment in FICC trading, in our view," RBC Capital Markets analyst Gerard Cassidy was quoted in a Reuters story as saying.
The stock losses on the day narrowed after Solomon expressed optimism about the outlook for dealmaking despite the volatility caused by the war in Iran and concerns about artificial intelligence-driven disruption.
"The environment for investment banking activity continues to be incredibly robust, particularly M&A (mergers and acquisitions) activity," Solomon said on an earnings call.
Goldman Sachs shares (NYSE: GS) closed US$17.01 (1.87%) lower at $890.79 on Monday (Tuesday AEST), valuing the company at $264.35 billion, before rising to $892.15 in after-hours trading.
Goldman Sachs is the first U.S. bank to report its earnings for Q1, with others to follow this week, including JPMorgan Chase (NYSE: JPM) on Tuesday (Wednesday AEST) and Wells Fargo (NYSE: WFC), Citigroup (NYSE: C), Bank of America (NYSE: BAC) and Morgan Stanley (NYSE: MS) on Wednesday.
