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.
Did you like this article?
For exclusive stock selection, investment ideas and global CNBC livestream
Sign up for CNBC Pro
Start your free trial now