Goldman Sachs said on Monday it beat earnings and revenue estimates with better-than-expected fixed-income results and smaller-than-expected loan loss provisions.
Here’s what the company said:
- Profits: $8.62 per share versus LSEG’s $8.34 per share estimate
- Income: $12.73 billion versus an estimate of $12.46 billion
Goldman said second-quarter earnings rose 150 percent from a year earlier to $3.04 billion, or $8.62 per share. The bank’s results a year ago were hampered by impairments linked to commercial real estate and the sale of a consumer business.
Companywide revenue rose 17% to $12.73 billion due to growth in the bank’s core trading, advisory and asset management and asset management businesses.
Fixed income was the highlight for the quarter. Revenue there rose 17% to $3.18 billion, about $220 million more than StreetAccount’s estimate, from activity in interest rate, currency and mortgage markets.
Another boost for Goldman came thanks to a shrinking of the firm’s exposure to consumer loans: The bank’s provisions for credit losses in the quarter fell 54% to $282 million. which is significantly lower than StreetAccount’s estimate of $435.4 million.
Elsewhere, the bank was just in line with expectations. For example, equity trading rose 7% to $3.17 billion, matching StreetAccount’s estimate, due to strength in derivatives activity.
The bank’s asset and wealth management division posted a 27% rise in revenue to $3.88 billion, which was also broadly in line with StreetAccount’s estimate for gains in equity investments and an increase in management fees.
The company’s platform solutions division saw revenue rise 2% to $669 million, beating estimates of $652.1 million, driven by growth in credit card balances and deposits.
But Goldman’s storied investment banking business has disappointed compared to its rivals. Investment banking fees rose 21% to $1.73 billion, slightly below StreetAccount’s estimate of $1.8 billion. The source of the failure appeared to be lower-than-expected consulting fees of $688 million, compared with an estimate of $757.3 million.
Goldman’s 21% rise in investment banking fees in the quarter compared with jumps of more than 50% for both JPMorgan Chase and Citigroup; JPMorgan specifically cited a flurry of activity toward the end of the period that boosted results.
Chief Financial Officer of Goldman Dennis Coleman told reporters the bank still had the No. 1 market share for mergers and the comparison was to better relative performance a year ago.
Shares of New York-based Goldman rose more than 1 percent in midday trading.
Expectations have been set high for Goldman Sachs, with Wall Street businesses in the midst of a recovery after a dismal 2023. That’s because of the six biggest US banks, Goldman relies more on investment banking and trading for revenue generation.
On Friday, rivals JPMorgan and Citigroup beat expectations thanks to increased investment banking fees and better-than-expected stock trading results.
the bank of america and Morgan Stanley results report on Tuesday.
