Goldman Sachs beats analysts' forecasts despite slide in revenues

Earnings fell 6% to $2.42bn while net revenues slipped 2% year-on-year, to $9.46bn, comfortably ahead of the $8.8bn most analysts had pencilled in. Diluted earnings per share were $5.81 against $5.98 a year earlier. That was also significantly above analyst forecasts for around $4.89.

Investment banking revenues fell 9%, weighed down by “significantly lower net revenues in debt underwriting, primarily reflecting lower net revenues from investment-grade and leveraged finance activity”, although the fall was not as bad as analysts had predicted.

Revenues also eased in investment management and institutional client services, where Goldman Sachs said fixed income, currency and commodities (FICC) client execution “continued to operate in an environment characterised by generally low levels of volatility and low client activity”.

The investing and lending unit, however, reported a 16% year-on-year jump in revenues to $2.53bn, the highest quarterly performance in eight years.

David Solomon, who became chairman and chief executive of the Wall Street bank last year, said: “We’re encouraged by the results for the first half of the year as we continue to invest in new businesses and growth to serve a broader array of clients.

“Given the strength of our client franchise, we are well positioned to benefit from a growing global economy. And our financial strength positions us to return capital to shareholders, including a significant increase in our quarterly dividend in the third quarter.”

Shares in Goldman Sachs put in more than 1% in pre-market trading.