NEW YORK (CNN/Money) - Goldman Sachs Inc.'s profit sank 32 percent in the latest quarter, hurt by the sluggish economy, yet the company, one of the world's premier investment houses, beat Wall Street estimates for the fiscal first quarter.

New York-based Goldman said earnings for the quarter ended Feb. 22 fell to $524 million, or 98 cents a share, from $768 million, or $1.40 a share, a year earlier.

Analysts polled by earnings tracker First Call had forecast 89 cents a share.

Revenue sank to $5.7 billion from $6.1 billion.

Goldman Sachs (GS: Research, Estimates) stock jumped about 2 percent in afternoon trading Tuesday following the announcement.

The results mark the sixth straight quarterly profit drop for the company, which was hurt by investor jitters over recent accounting scandals at Enron and other firms, and also by the down economy.

"Weakness in the capital markets, compounded by an erosion of corporate and investor confidence, has depressed activity in a number of our most important businesses," CEO Henry Paulson said. "While we have seen some encouraging economic data of late, the current environment remains very challenging."

Though revenue was down in most segments, Goldman managed to slash expenses by 2 percent to $2.8 billion, helping the bottom line. The cost cuts included a 2 percent work force reduction, along with a 12 percent reduction in non-compensation expenses.

Goldman, the world's biggest stock underwriter and merger adviser, said it expects further modest job cuts in 2002 as it seeks to control expenses.

Investment banking revenue fell to $893 million from $1.2 billion a year earlier, and merger advisory income dropped 37 percent to $457 million, while underwriting revenue rose to $436 million from $415 million.

The firm blamed decreased investment banking revenue on lower levels of activity across nearly all sectors, particularly media and entertainment, high technology and health care.

Net revenue from asset management and securities services fell 4 percent to $1.4 billion, though the amount of assets under new management grew 14 percent from a year ago to $344 billion.