David Solomon, CEO, Goldman Sachs, speaking at the World Economic Forum in Davos, Switzerland, on January 23, 2020.
Adam Galacia | CNBC
Goldman Sachs reported windfall earnings for the second quarter as the company’s focus on trade and investment banking paid off during the market turmoil caused by the coronavirus pandemic.
The bank earned $ 6.26 a share in the second quarter, beating Wall Street’s estimate of $ 3.78 a share
Here is a list of the bank’s significant milestones for the quarter:
- Revenue of $ 13.3 billion was the second highest for the company and 41% more than a year ago.
- Fixed-income business revenue reached $ 4.24 billion, the highest in 9 years.
- Stock trading revenue was $ 2.94 billion, the best quarter in 11 years.
- Investment banking revenue was a record $ 2.66 billion.
Goldman’s shares rose 4% after pre-market trading results.
“Our strong financial performance in our clients’ franchises demonstrates the inherent benefits of our diversified business model,” President and CEO David Solomon said in a statement. “The turmoil we have seen in the past few months only reinforces our commitment to the strategy we outlined earlier this year for investors. While the economic outlook remains uncertain, I am confident that we will continue to be the company of choice for customers across the globe. the world seeking to remodel their businesses and rebuild a more resilient economy. “
The firm also said it earmarked another $ 1.59 billion for potential credit losses due to the coronavirus.
This is what Wall Street expected:
Earnings: $ 3.78 per share, a 35% decrease from the previous year, according to Refinitiv.
Revenue: $ 9.75 billion, 3% more than the previous year.
Business income: Fixed income: $ 2.53 billion; Shares: $ 2.04 billion.
Investment bank income: $ 2.1 billion.
Here is a link to the full version.
Expectations for CEO David Solomon’s bank were running low after JPMorgan Chase and Citigroup published strong advisory and business results that helped banks beat second-quarter earnings estimates.
Of the six largest banks in the United States, Goldman derives most of its income from Wall Street activities, including business operations and investment banking. In recent years, that has been to the detriment of the company, as retail banking fueled by cheap consumer deposits has fueled record industry earnings.
Goldman’s shares fell 7% this year through Tuesday’s close, compared with a 36% decline in the KBW Bank index.
This story is unfolding. Please check for updates.
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