Brendan McDermid | Reuters
Goldman Sachs said profit surged 40 percent to $2.57 billion, exceeding analysts’ estimates on better-than-expected revenue from investment management and investing & lending divisions.
Earnings of $5.98 per share exceeding the $4.66 estimate of analysts surveyed by Thomson Reuters. Company-wide revenue rose 19 percent to $9.40 billion, beating the $8.74 billion estimate.
The bank's shares slipped 1 percent in pre-market trading after posting results. The firm said that non-compensation expenses surged 24 percent to $2.66 billion from a year earlier after setting aside more money for litigation and regulatory proceedings. That was about $200 million more than analysts had been expecting.
“Solid performance across all of our major businesses drove the strongest first-half returns in nine years," Chief Executive Officer Lloyd Blankfein said in the statement. "With a healthy economic backdrop and deep client franchises, the firm is well-positioned to invest in attractive opportunities to meet the needs of our clients and continue to generate earnings growth.”
Goldman is at a crossroads. After 12 years running the investment bank, Blankfein is set to announce that David Solomon, the bank's current president, will soon take over the top role.
Stung by an industry-wide slowdown in trading and restrictions on risk-taking, Goldman has yet to regain the profitability it had in the wake of the financial crisis. The new CEO will have to focus on the firm's historic strengths of trading and deal-making, while aggressively expanding a new consumer-facing business.
Last month, Goldman was forced to maintain its dividend and share buyback plans unchanged from last year after fumbling a key part of its annual stress test. Its shares are 9.2 percent lower this year, under-performing rivals including J. P. Morgan Chase and Morgan Stanley and the broader indexes.
Here’s what Wall Street expected:
Earnings: $4.66 per share, an 18 percent increase from a year earlier, according to the average analyst estimate compiled by Thomson Reuters.Revenue: $8.74 billion, an 11 percent increase, according to the average estimate compiled by Thomson Reuters.Trading revenue: Fixed income at $1.65 billion, equities at $1.91 billion, according to FactSet.This story is developing. Please check back for updates.
