Goldman’s earnings blow past estimates as investment banking revenue boosted by strong IPO market

Goldman Sachs on Tuesday reported second-quarter earnings that blew past Wall Street expectations, propelled by strong performance in investment banking amid a robust IPO market.

Here are the numbers:

Earnings: $15.02 per share vs. $10.24 expected by analysts polled by Refinitiv. A year ago, Goldman recorded an EPS of $6.26 (53 cents per share if accounted for costs related to the 1MDB settlement.)
Revenue: $15.39 billion vs. $12.17 billion expected

Investment banking posted its second-highest revenue quarter ever, behind the first quarter of 2021, as a booming IPO market boosted Goldman’s equity underwriting.

Net revenues from investment banking totaled $3.61 billion, ahead of consensus estimate of $3 billion, according to FactSet. Goldman said the second quarter also recorded the second strongest performance in financial advisory, equity underwriting and debt underwriting. The backlog increased significantly compared with the end of 2020, ending the quarter at a record level, the bank said.

Last month, following the strong results of the Federal Reserve’s annual stress test, Goldman said it planned on boosting its dividend by 60% to $2 per share, subject to approval from the bank’s board.

For its first quarter of 2021, the New York-based bank blew past analysts’ expectations with record net profits and revenues on strong performance from the firm’s investment banking and trading businesses, thanks to a rise in retail banking fueled by cheap consumer deposits.

Of the six biggest U.S. banks, Goldman gets the largest share of its revenue from Wall Street activities including trading and investment banking.

Shares of Goldman have risen 45% in 2021 on the back of the economic recovery from the Covid-19 pandemic.

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