Goldman Sachs GS earnings Q2 2021 blow past estimates

Goldman Sachs reported second quarter earnings on Tuesday that exceeded Wall Street expectations, fueled by strong investment banking performance amid a robust IPO market.

Here are the numbers:

Merits: $ 15.02 per share versus $ 10.24 expected by analysts surveyed by Refinitiv. A year ago, Goldman posted earnings per share of $ 6.26 (53 cents per share when the costs associated with the 1MDB comparison are included).
Revenue: $ 15.39 billion versus an expected $ 12.17 billion

Goldman shares rose 0.5% in pre-trading hours after the results were released. The stock is already up 45% in 2021 as investors expected strong results given the economic comeback of the pandemic.

Investment banking had its second-highest quarter of revenue ever after Q1 2021 as a booming IPO market fueled Goldman’s stock underwriting.

Companies are rushing to go public this year to take advantage of a record high stock market. Capital raised through traditional IPOs so far in 2021 was a record $ 135 billion, according to FactSet, beating the five-year average of just $ 53 billion annually.

Goldman’s net investment banking revenue was $ 3.61 billion, up from the consensus estimate of $ 3 billion, according to FactSet. The order backlog increased significantly from the end of 2020 and closed the second quarter at a record level, the bank announced.

Since the beginning of the year, the New York-based bank has been number one in global mergers and acquisitions, global stock and equity-related offerings, common stock offerings, and initial public offerings.

Goldman’s trading operations saw an expected slowdown as the boom in pandemic volatility subsided. Net income was $ 4.90 billion for the last quarter, compared to $ 7.58 billion in the first quarter of 2021. The total was split between $ 2.23 billion in stock trading and $ 2.58 billion Dollars in bond trading. According to FactSet, both numbers were slightly above estimates.

The asset management unit had record sales of $ 5.13 billion in the second quarter, fueled by record sales from equity investments.

Goldman also announced that its board of directors has approved a proposed 60% increase in its quarterly dividend to $ 2 per share, beginning in the third quarter of 2021.

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