Goldman Sachs Group Inc. said Tuesday its second-quarter profit easily surpassed expectations as profit was buoyed by strength in its trading and underwriting businesses.
Long considered one of the strongest banks in the financial sector, analysts widely expected Goldman's profit to continue its rebound. Goldman posted a quarterly loss during the final quarter of 2008 amid the mushrooming credit crisis before returning to profitability in the first three months of 2009.
During the quarter ended June 26, the New York-based banking giant earned $2.72 billion, or $4.93 per share, after preferred stock dividends.
Goldman recorded a charge of 78 cents per share as it repaid the government's $10 billion investment in the bank as part of the Troubled Asset Relief Program. The bank had previously announced it would be taking the charge during the second quarter.
Goldman Sachs reported a profit of $2.05 billion, or $4.58 per share, for its fiscal second quarter last year, which ended on May 30. Goldman changed its quarterly reporting periods after changing its regulatory structure to become a bank holding company last fall amid the deepening credit crunch.
Analysts polled by Thomson Reuters, on average, forecast earnings of $3.54 per share for the quarter on revenue of $10.66 billion.
Goldman's second-quarter net revenue totaled $13.76 billion. It generated $9.42 billion in revenue during its fiscal second quarter last year.
The bank generated a record $6.8 billion in revenue from fixed income, currency and commodities trading during the quarter. Particularly strong trading in credit and interest rate products and currencies help boost Goldman's fixed income, currency and commodities trading.
Equities trading revenue totaled $3.18 billion during the quarter due in part to stronger trading in derivatives. It generated $811 million in revenue from principal investments.
Goldman was also able to take advantage of a crush of equity offerings from other financial firms and companies as the credit and stock markets rebounded during the spring. It generated record net revenue of $736 million from underwriting equity offering during the quarter, surpassing its previous record set in 2000.
This program aired on July 14, 2009. The audio for this program is not available.