Update: Despite the strong report, Goldman Sachs is trading down a tad in early action. But given the huge move yesterday, traders are obviously impressed with the report — even factoring in the mile-high expectations.
Original post: Surprise, surprise. Goldman Sachs (GS) has posted a monster quarter.
Revenue of $13.8 billion blew away $10.6 billion estimates, and EPS of $4.93 was far ahead of the $3.53 consensus. Yesterday we joked that expected net income of $2 billion meant 2 billion more reasons to hate Goldman Sachs. Well, make that 3.44 billion reasons.
The stock is roughly flat — after rallying yesterday — though just the fact that there’s no sharp pullback should be considered a victory, considering the huge expectations.
Here are their highlights:
–Goldman Sachs ranked first in worldwide announced mergers and acquisitions for the calendar
–Equity underwriting produced record quarterly net revenues of $736 million, surpassing the
previous record set in the second quarter of 2000.
–Fixed Income, Currency and Commodities (FICC) generated record quarterly net revenues of
$6.80 billion, reflecting strength across most businesses, including record results in credit
— Equities generated record quarterly net revenues of $3.18 billion, reflecting strong results
across the client franchise businesses.
— On June 17, 2009, the firm repurchased the preferred stock that was issued to the U.S.
Treasury pursuant to its TARP Capital Purchase Program. In addition, the firm completed a
public offering of common stock for proceeds of $5.75 billion during the quarter.
— Book value per common share increased approximately 8% during the quarter to $106.41 and
tangible book value per common share (4) increased approximately 10% during the quarter to
And this is the language from Lloyd Blankfein:
“While markets remain fragile and we recognise the challenges the broader economy faces, our
second quarter results reflected the combination of improving financial market conditions and a
deep and diverse client franchise,” said Lloyd C. Blankfein, Chairman and Chief Executive Officer.
“Our role as an intermediary focused on making markets for buyers and sellers helped drive our
performance. We were also active as an underwriter of many significant debt and equity offerings
So, fragile, but improving. In other words, nothing you didn’t know there. But at least all the debt being offered these days is helping out. Indeed total debt underwriting jumped 35%. Here’s the full sequential comparison. As you can see, besides the gain in debt issuance, it was all trading, which turned in another monster.
We’ll be covering the conference call LIVE at 11:00 AM.
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