Goldman Sachs’ Second Quarter Results Shatters Analysts’ Expectations As Trading Business Surges

Goldman Sachs (GS) posted second quarter earnings that far exceeded analysts’ expectations on Wednesday morning.

Goldman recorded earnings of $6.26 per share on revenue of $13.3 billion.

Wall Street expected earnings of $3.78 per share and revenue of $9.75 billion

The revenue figure surged 41% from the year-ago quarter and represented the second largest quarterly figure in the bank’s history.

The company’s results were boosted by its trading activities – the bank generated $4.24 billion in fixed income revenue (versus analysts’ expectations of $2.53 billion), the most in nine years. Equities trading revenue came in at $2.94 billion (versus expectations of $2.04 billion), the best quarterly performance in 11 years. The firm also reported a record $2.66 billion in investment banking revenue (versus analysts’ expectations of $2.1 billion).

Bloomberg Markets tweeted: “Goldman Sachs made the most of a historic market rebound in the second quarter.”

Goldman also noted that it set aside another $1.59 billion to cover for possible credit losses arising from the coronavirus pandemic.

Like its peers JPMorgan Chase (JPM) and Citigroup (C), Goldman benefitted from its robust trading business.

When Goldman reported its first-quarter results in April, the company noted that "high levels of client engagement" drove revenue increases at its trading desk.

However, Goldman shares have dropped 6.9% year-to-date through Tuesday.