Goldman Sachs top analysts’ expectations in quarterly report

Due to an unprecedented success in revenue from fixed-income trading of almost $700 million, Goldman Sachs reported earnings and revenue on Monday that surpassed analysts' expectations.

The bank reported earnings of $7.73 per share versus Refinitiv's expectation of $6.58 per share. Revenue was $11.86 billion versus analysts' $10.86 billion. 

Profit for the second quarter decreased by 48% to $2.79 billion, or $7.73 per share, as a result of falling revenue from investment banking across the country. However, the results exceeded the average analyst expectation by more than a dollar.

A 55% increase in fixed income revenue caused revenue to decline by 23% to $11.86 billion, which was $1 billion higher than analysts had predicted.

The bank's fixed income divisions generated $3.61 billion in revenue, exceeding the $2.89 billion StreetAccount estimate.

Shares of Goldman increased by 4.1% in premarket trade.

Rival financial institutions including Morgan Stanley and JPMorgan Chase reported sharp drops in Q2 advisory revenue. However, Citigroup, a different rival on Wall Street, recorded a 25% increase in trading revenue.

In times of significant volatility, Goldman reportedly performs better than other banks, which may be advantageous for the company. 

Through its numerous investment products, the bank also frequently reaps the benefits of rising asset values, therefore broad falls in financial assets could be detrimental to the company. The equity holdings of JPMorgan and Wells Fargo both saw reductions, leading to writedowns.

Analysts are interested in learning how the deal pipeline looks for the rest of 2022 from CEO David Solomon and whether acquisitions and IPOs are being put on hold or simply delayed until later quarters, CNBC.

Through Friday, Goldman shares had dropped 23%, outperforming the KBW Bank Index's 16 percent slump.

JPMorgan and Wells Fargo reported second-quarter losses last week as the banks allocated more money for anticipated loan losses, while Morgan Stanley underperformed following a more significant investment banking downturn than anticipated. The only company to surpass revenue projections was Citigroup, which profited from increasing rates and strong trading performance.