If the it weren't for the massive $5.64 billion repayment to Warren Buffett for his souped-up preferred shares, Goldman Sachs (NYSE: GS) would've hit one out of the ball park. Still, it still managed to beat analysts expectations for the first quarter. It reported $1.56 a share, compared with expectations of 82 cents a share.

However, market making revenue from FICC, the biggest unit, fell 28 percent to $4.33 billion. There were some significant offsets to this decline. Net revenue for investment banking came in at $1.27 billion, 5 percent higher than in the first quarter of 2010. Much of that growth came from stock and debt underwriting. In something of a disappointment, financial advisory revenue dropped 23 percent.

But investment management was strong, as revenue rose 16 percent to $1.3 billion.

The big win in the first quarter was in proprietary activity, the type that Dodd-Frank apparently allows. Revenue from investing and lending, the second-biggest business unit, rose 37 percent to $2.71 billion from $1.97 billion a year earlier and compared with $1.99 billion in the fourth quarter.

In some ways, this is classic Goldman Sachs, using principal investments to goose earnings. The market reacted in classic fashion as well, selling off.

In addition, the bank set aside $5.2 billion for compensation in the first quarter, down 5 percent from the $5.5 billion it reported a year earlier. Compensation per employee fell 11 percent from a year ago, reflecting a rise in the headcount.

For more:
- here's a Dow Jones article on compensation

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