Goldman Sachs: Q2 earnings

Summary of Goldman Sachs's earnings for its second quarter, following which shares went up 2.5% in the pre-market (12.35pm London time).

 

Revenue

Earnings per share

Expected

$7.98 billion $3.09

Actual

$9.13 billion $4.10

 

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For the current quarter, Goldmans exceeded expectations. It is the seventh time in the past eight quarters that the bank has pulled off the trick of beating forecasts by a double-digit margin.

There was the expected drop in trading revenues, but the bank’s own proprietary trading arm made $2.1 billion in revenues, up 46% from last year. Equity underwriting rose too, an encouraging sign, even if operating and litigation expenses were up as well.

On a valuation basis, there are tempting signs for investors. At around ten times forward earnings and just 1.1 times book value, the shares are not too expensive, while the dividend and share repurchase programme offer attractions for income investors.

The share price is stuck midway in its range of $150-$180, but any close through $170 (the June high) would suggest more gains on the upside, supported by a turnaround in the relative strength index which has moved above the 50 level. 

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