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GS posts huge earnings beat; JPM blows past estimates

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Yahoo Finance’s Brian Sozzi, Myles Udland, and Brian Cheung break down the earnings reports for Goldman Sachs, JPMorgan, and Wells Fargo.

Video Transcript

MYLES UDLAND: But today again, also marks the unofficial beginning of first quarter earnings season with the banks starting their reporting. We begin there this morning with Yahoo Finance's Brian Cheung for the latest from the firm's we've heard so far. And Brian, we see shares of Goldman Sachs reacting positively in the premarket to their results.

BRIAN CHEUNG: Well, Myles, let's take a look at the three big banks that have reported. As you mentioned, this means that earnings season for the first quarter of 2021 has indeed kicked off. So three big banks this morning. Let's break it down by heading to the money center in New York City first. Goldman Sachs with a massive beat on the top and bottom line. $17.7 billion. That is a quarterly record. On the bottom line, $18 bucks and $0.60, handily beating the street's estimates of about $10 per share.

But get this. $3.77 billion in investment banking revenues. That's also a quarterly record for the investment bank there. And a lot of that due to the craze for capital. We've been talking about SPACs, IPOs as of late. That meant that equity underwriting for Goldman Sachs, you guessed it. That was also a record.

But let's take the 4, 5 train up to Midtown to JPMorgan Chase. Revenue for that bank coming in at $33.1 billion, beating the street's estimates of $30.4 billion. Earnings per share clocking in at $4 bucks and $0.50 a share. Again, handily beating the estimates of about $3 on the street. Jamie Dimon, the head of that bank, saying that there's the potential for extremely robust multi-year growth, which might explain the bank's $5.2 billion in net reserve releases for the quarter.

Also take a note though at their loan portfolio. Not necessarily a great quarter for a lot of these consumer banks. That could be a theme. Average loans up only 1%. So the story, if you can't loan, then trade. Their markets revenue was about $9.1 billion. That's up about 25% at that bank. Then last, let's kick it over to San Francisco on the other coast. Wells Fargo, $18 billion on the top line. That beat the estimates of $17.5 on the top line.

Bottom line also beating, not by as much as the other two banks, but coming in at a buck $0.05 compared to about $0.70 on the street's estimates. Now this is obviously a very consumer-focused bank. They're still basing that asset cap from the Federal Reserve, but they still were able to release some of their reserves that they had also been stashing. About $757 million the bank reporting having released during this quarter.

Same story here. Average loans was about $353 billion. That's down about 8%. So loan growth not necessarily a story at these banks. And also the case when you consider net interest margin, a key metric for those very lending-heavy banks coming down at both JPMorgan and Wells Fargo. And guys, as a reminder, we'll get another kind of piece of the story with Bank of America and Citigroup reporting tomorrow. But that being the wrap-up for the three big banks reporting today, guys.