Goldman Sachs traders helped the Wall Street bank ride out a slump in deals and post better-than-expected second-quarter earnings.
In second-quarter earnings Monday, Goldman reported a 47% drop in net income to $2.9 billion, or $7.73 per share, from $5.5 billion, or $15.02 per share, in the same period last year. That was above analysts’ estimates of $2.6 billion, or $6.65 a share, according to consensus data compiled by Bloomberg.
First-quarter net income was $11.9 billion, down from $15.4 billion a year earlier but beating analysts’ estimates of $10.7 billion.
Investment banking revenue fell 41 percent to $2.1 billion, in line with analysts’ estimates. Rivals JPMorgan Chase and Morgan Stanley last week reported declines of 61% and 55% respectively in investment banking revenue.
In investment banking, Goldman said its overall deal backlog shrank in the quarter, reflecting a “significant decline” in debt and equity underwriting, partially offset by an increase in advisory activity.
Revenue at Goldman’s trading arm, which has benefited from heavy trading during recent market volatility, rose 32 percent to $6.5 billion, staying above pre-pandemic levels and beating analysts’ estimates of $5.8 billion. Trading revenue rose 15 percent at JPMorgan and 21 percent at Morgan Stanley.
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As the results came amid recession worries, Goldman Chief Executive David Solomon said in a statement that he remained “confident in our ability to navigate the environment, dynamically manage our resources and drive long-term, incremental returns for shareholders “.
Goldman said its board of directors had approved a 25 percent increase in its quarterly dividend to $2.50 a share.
Goldman also made a $667 million provision for credit losses in the quarter amid growing concerns that a potential U.S. recession would affect credit quality.
The bank’s asset management division reported revenue of $1.1 billion, down 79% from the same period last year, as Goldman benefited from significant gains on its equity investments. Analysts had forecast revenue of $685 million.
Revenue at the consumer and wealth management division, which includes Marcus Online Bank and Apple Credit Card, rose 25% to $2.2 billion, slightly above analysts’ estimates of $2.1 billion.
Goldman shares traded up about 3.5 percent in premarket trading in New York.
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