Goldman Sachs, in another sign that banks may be turning around, beat Wall Street's earnings expectations as it reported a profit of $1.66 billion US for the first three months of this year. The bank also said it planned to raise $5 billion in stock to help it pay back government bailout funds.

The New York-based bank said it earned $3.39 per share, easily surpassing analysts' forecasts for a profit of $1.64 per share. This compares with earnings of $1.47 billion, or $3.23 per share, in the quarter ended Feb. 29 of last year, and is a huge improvement over the $2.29 billion Goldman lost in the fourth quarter.

Goldman's news, released Monday, a day earlier than anticipated, came days after another top-performing bank, Wells Fargo & Co., said it expected to report record first-quarter earnings of $3 billion, well above Wall Street's estimates. That news fed a huge stock market rally Thursday, but with companies including Citigroup Inc. and Bank of America Corp. still to report their first-quarter results, it's too soon to say the banking industry is indeed finally recovering from the devastating losses caused by the credit crisis and the recession.

Morningstar Inc. equity analyst Michael Wong said Goldman benefited from the fact that it has more traditional investment banking and trading operations than more retail-focused banks like Citi and Bank of America.

"What allowed Goldman to outperform is solely tied to their brokerage operations," he said.

Still, Goldman's first-quarter performance put it in a strong enough position to plan the public stock offering of $5 billion which it said would be used, with additional resources, to pay back its government debt. Goldman received $10 billion in U.S. government funds during the downturn last fall as part of the U.S. Treasury Department's program to invest directly in hundreds of banks and try and help alleviate the nearly frozen credit markets.

Goldman executives have said for months that the company wanted to repay bailout funds this year, and last month, company spokesman Lucas Van Praag said the main reason Goldman wanted to return the money is that it doesn't need the funds.

Many banks have chafed under restrictions, including limits on executive compensation, imposed by the government as it dispensed the bailout money. The banks have also come under sharp criticism from lawmakers and the public for a variety of business practices.

Goldman said its first-quarter profit was bolstered by strong revenue growth in its fixed income and currency businesses. The Treasury market and the dollar were beneficiaries of investor uncertainty during the first two months of the year; in March, the stock market began a five-week rally that lifted the major indexes off 12-year lows.

Goldman's total revenue was $11.88 billion during the quarter, compared with $18.63 billion in the prior-year quarter. Analysts forecast revenue of $7.19 billion.

Goldman's fourth-quarter loss was its first since becoming a public company in 1999. The company, like other financial firms, was hurt by the plunging value of its investments as the credit crisis eroded the value of mortgage-backed securities, stocks and many other assets.