Goldman Sachs Q1 results: Cramer dubs the bank star of the day

Goldman Sachs Group Inc (NYSE: GS) is up roughly 2.0% in the stock market on Thursday after the Wall Street bank reported YoY decline in its profit and revenue, but handily beat the Street estimates.

What Goldman Sachs Q1 results tell us

• Net profit came in at $3.83 billion that translates to $10.87 a share.
• In the same quarter last year, net profit stood at $6.71 billion ($18.60 a share).
• Revenue fell 27% to $12.93 billion, as per the earnings press release.
• FactSet consensus was for $8.90 of EPS on $11.86 billion in revenue.
• Global Markets revenue jumped 4.0% YoY and FICC was up 21%.

CEO David Solomon’s remarks on the earnings call

Investment banking revenue sunk 36% due to an 83% hit to equity underwriting revenue. Book value gained 3.0% in the recent quarter. On the earnings call, CEO David Solomon said:

Q1 was extremely volatile. Russia invaded Ukraine, inflation rose, and trend accelerated towards deglobalisation. We’ve grown used to low inflation, low rates, and free flow of people and goods across national borders. I believe we’re entering a period where that won’t be the case. And the consequences for the financial markets will be meaningful.

Jim Cramer comments on Goldman Sachs’ results

Goldman Sachs reported an 18% annualised decline in expenses that the Mad Money Host Jim Cramer dubbed “very impressive”. Discussing the earnings report on CNBC’s “Squawk on the Street”, he said:

This quarter CEO David Solomon said I told you I can adjust my expenses, I had a stream of consistent revenue, the capital market will do good no matter what; you didn’t believe me. I won all three checks. So, Goldman Sachs is the star of the day.

In late February, a Wells Fargo analyst said Goldman Sachs could be a $420 stock.