GS: Goldman Sachs Stock Pops as Earnings Crush Estimates. Thank Equity Traders… Again

Whopping $840 million more revenue than expected was brought in from the trading division. Overall, it was a good quarter for the old man in banking.

💰 Goldman Sachs Beats Big

• Goldman Sachs stock GS popped 1% in premarket trading Wednesday, as the feared Wall Street giant blew past profit and revenue estimates for the second quarter — all thanks to a blockbuster performance from its trading desks.
• The bank posted earnings of $10.91 per share, well above the $9.53 expected. Revenue landed at $14.58 billion, comfortably beating consensus by more than $1 billion.
• The stock is up 23% year-to-date, as investor faith in Goldman’s trading edge and strategic pivots shows no signs of fading.

📈 Equities Desk Books a Record

• Equities traders brought in a record $4.3 billion in revenue for the second quarter in a row, topping expectations by more than $840 million, and showing just how much a good rally can fatten the bank’s top line.
• Overall profits jumped more than 21% to $3.7 billion, compared to $3 billion in the same quarter a year ago.
• The surprise boost in investment banking fees added extra fuel, marking a rare bright spot for an industry that’s still finding its feet after last year’s deal drought.

☂️ Veteran Still Knows How to Make It Rain

• The big beat puts Goldman, a 150-year old bank, on stronger footing heading into a choppier macro backdrop, with trade headlines and Fed policy shifts in the mix. The results followed JPMorgan’s JPM earnings update, which showed the lender’s performance dipped year on year.
• CEO David Solomon can point to a solid quarter as proof that Goldman’s classic strength — high-stakes trading — still pays the bills while other units evolve.
• With shares up nearly a quarter this year and momentum building in its core franchises, Goldman Sachs reminds the Street that old dogs can still pull off new tricks — or just keep doing the old ones really, really well.