Updated Thursday, October 23, 2014 as of 7:45 AM ET

Goldman Sachs Beats Estimates on Investment-Banking Revenue

(Bloomberg) -- Goldman Sachs Group Inc., the world’s most profitable securities firm before the financial crisis, reported earnings that topped analysts’ estimates on a 63 percent gain in revenue from underwriting stocks and bonds.

First-quarter net income rose 7 percent to $2.26 billion, or $4.29 a share, from $2.11 billion, or $3.92, a year earlier, the New York-based company said today in a statement. That was higher than all 24 analysts’ estimates in a Bloomberg survey.

Record debt-underwriting revenue and cost-cuts helped Chief Executive Officer Lloyd C. Blankfein, increase return on equity to 12.4 percent from 12.2 percent a year earlier. Blankfein, 58, has sought to boost returns by cutting $1.9 billion in expenses and benefiting as trading volume increases and some competitors exit business lines.

“It was a pretty good quarter from a capital-markets perspective,” Keith Davis, an analyst at Farr, Miller & Washington LLC, which manages about $890 million, including shares of Goldman Sachs, said before the results were released.

Goldman Sachs dropped to $146.30 in New York trading at 8:19 a.m. from $146.46 yesterday. The stock gained 15 percent this year through yesterday after advancing 41 percent in 2012. The shares reached $193.60 on Oct. 14, 2009.

Revenue rose 1 percent to $10.1 billion. Compensation, the firm’s biggest expense, fell 1 percent to $4.34 billion and amounted to 43 percent of revenue for the quarter, down from 44 percent a year earlier.

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