The big investment firm also sets plans to sell $5 billion in stock, paving the way for it to repay its TARP loans.

    By Colin Barr

    Goldman Sachs reported a much stronger-than-expected first-quarter profit Monday, bouncing back from its worst quarter as a public company.

    Goldman (GS, Fortune 500) also set plans to raise $5 billion through a sale of stock, saying it wants to become the first big bank to repay the federal loans extended during last fall's financial sector meltdown.

    In reporting its results a day earlier than expected, New York-based Goldman said it earned $1.81 billion, or $3.39 a share, for the quarter ended March 31. Analysts surveyed by Thomson Financial were looking for a profit of $1.64 a share.

    Goldman shares, which have surged more than 70% during the past month, continued rising late Monday, gaining about 4.7% for the day. Shares were down slightly in after-hours trading.

    With the results, Goldman (GS, Fortune 500) bounced back decisively from the last quarter of 2008, when it posted its only quarterly loss since becoming a public company in 1999.

    The firm said the latest quarter's gains were driven by big profits in its fixed income business, where revenue surged to $6.56 billion - 34% above the previous record.

    "Given the difficult market conditions, we are pleased with this quarter's performance," said CEO Lloyd Blankfein in a statement.

    In addition to the record fixed income revenue, which Goldman said was driven by "strong performance in interest rate products, commodities and credit products," Goldman also posted $7.15 billion in trading and principal investment revenue.

    But Goldman's principal investments lost $1.41 billion during the quarter, reflecting losses on real estate and a stake in a Chinese bank.