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Goldman Sachs on Tuesday reported earnings that beat analyst estimates, reflecting the better performance in the equity markets.

The firm said its first-quarter profit was $2.1 billion, down 23 percent from $2.74 billion in the same period in 2011. But its earnings per share was $3.92, better than the $3.55 a share that analysts had estimated, according to Thomson Reuters.

Goldman’s revenue fell to $9.95 billion, down from $11.89 billion in the year-ago period.

Analyst estimates have been rising steadily for weeks in anticipation of a stronger quarter.

In the first quarter of 2011, Goldman reported per-share earnings of $1.56, but that reflected a large one-time expense as it moved to pay off a financial crisis lifeline it received from the billionaire Warren E. Buffett, who was awarded preferred shares in the company.

The company also said Tuesday that its board voted to increase the quarterly dividend on common stock to 46 cents a share, from 35 cents a share.

Goldman’s revenue was higher than the fourth quarter, but was down almost across the board from a year ago. Only two main business segments — investment bank and fixed income – performed better than in the first quarter of 2011.

Still, Goldman Sachs and other major banks are faring much better in 2012. Wells Fargo, Citigroup andJPMorgan Chase all beat analysts’ estimates, buoyed by generally improving conditions in the United States. The better economy has led to revenue growth at most banks as demand for items like mortgage loans increased.

“We are pleased with the firm’s solid performance for the quarter,” Lloyd C. Blankfein, Goldman’s chairman and chief executive, said in a statement.

He credited the better-than-expected earnings to stronger capital markets. “Because client activity remains relatively low in certain areas, especially in parts of investment banking, we believe that our mix of businesses gives the firm significant room for revenue growth as economic and market conditions continue to improve,” he said.

The results come on the heels of a difficult period for the firm. In 2011, Goldman struggled to produce a profit anywhere near where it has historically performed. It has also faced a number of public relations and staffing challenges. It has had higher-than-usual turnover in the firm’s top ranks, with dozens of Goldman partners leaving the bank over the last year.

The firm has also been criticized for trading against its clients. And last month, one of its employees resigned and public criticized the firm for putting its own needs ahead of its clients, an allegation the firm denies.

Two years ago this week, Goldman was charged by the Securities and Exchange Commission with duping clients by selling mortgage securities designed by a hedge fund that sought to profit from the housing market’s collapse. Goldman later agreed to pay $550 million to settle the charges, without admitting or denying guilt.

Revenue in Goldman’s largest division, institutional client services, which trades bonds, currencies and commodities, was $5.71 billion, down 14 percent from year-ago levels. The division is a powerhouse for the bank, accounting for roughly 57 percent of all revenue generated in the first quarter.

Net revenue for the entire investment banking unit — which includes banking as well as debt and equity underwriting — came in at $1.15 billion, 9 percent lower than in the first quarter of 2011. Investment management net revenue was $1.18 billion, 8 percent lower than in the year-ago period.

In a sign of the challenging regulatory and economic environment, Goldman’s annualized return on equity, a critical measure of profitability, was 12.2 percent in the quarter. In 2006, its return on equity was 32.8 percent.

The firm set aside $4.38 billion, or 44 percent of its revenue, to pay employees. The firm does not actually pay much of that out until early 2013, after it knows the year-end performance.

Goldman’s headcount at the end of the first quarter was 32,400 employees, consultants and temporary workers. That was down 8 percent from the first quarter of 2011.

BY SUSANNE CRAIG DealBook NYT