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Goldman Sachs Tops Q2 Earnings Forecast As Trading Revenues Surge

Goldman Sachs said its global markets revenues rose 93% to $7.18 billion, helping offset a 70% rise in loan loss provisions and pushing the group's bottom line well ahead of Wall Street forecasts.

Goldman Sachs Group Inc.  (GS) - Get Goldman Sachs Group, Inc. (GS) Report posted much better-than-expected second quarter earnings Wednesday as it followed Wall Street rivals with a surge in trading revenues linked to market volatility during the peak of the coronavirus pandemic.

Goldman said profits for the three months ending in June were pegged at $6.26 per share, up 7.7% from the same period last year and well ahead of the Street consensus forecast of $3.78 per share. Group revenues, Goldman said, surged 41% to $13 billion, smashing analysts' estimates of a $9.75 billion tally.

Investment banking revenues, Goldman said, rose 36% to $2.66 billion, echoing the surge reported by U.S. rivals JPMorgan  (JPM) - Get JPMorgan Chase & Co. (JPM) Report and Citigroup  (C) - Get Citigroup Inc. Report yesterday. Net revenues for its global markets division, meanwhile, nearly doubled from last year to $7.18 billion. Loan loss provisions, however, were also notably higher from last year, rising 70% to $1.59 billion.

“Our strong financial performance across our client franchises demonstrates the inherent benefits of our diversified business model. The turbulence we have seen in recent months only reinforces our commitment to the strategy we outlined earlier this year to investors," said CEO David Solomon. "While the economic outlook remains uncertain, I am confident that we will continue to be the firm of choice for clients around the world who are looking to reshape their businesses and rebuild a more resilient economy.”  

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Goldman shares were marked 5% in early trading immediately following the earnings release to change hands at $224.47 each, a move that would trim the stock's year-to-date decline to around 1.5%.

Goldman also declared a quarterly dividend of $1.25 per share, payable on September 29, following a similar decision from JPMorgan, which declared a dividend of 90 cents per share following stronger-than-expected second quarter earnings on Tuesday.