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Goldman's (GS) Q2 Earnings & Revenues Beat Estimates

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Have you been eager to see how The Goldman Sachs Group, Inc. (GS - Free Report) performed in Q2 in comparison with the market expectations? Let’s quickly scan through the key facts from this NY-based popular bank’s earnings release this morning:

An Earnings Beat

Goldman came out with earnings per share of $5.98, easily surpassing the Zacks Consensus Estimate of $4.67. Further, the figure compared favorably with earnings of $3.95 in the prior-year quarter. Higher revenues were primarily responsible for this earnings beat.

How Was the Estimate Revision Trend?

You should note that the earnings estimate revisions for Goldman depicted pessimism prior to the earnings release. The Zacks Consensus Estimate declined 1.1% over the last seven days.

Yet, Goldman has an impressive earnings surprise history. Before posting earnings beat in Q2, the company delivered positive surprises in all the prior four quarters. Overall, the company surpassed the Zacks Consensus Estimate by an average of 18.13% in the trailing four quarters.
 

Revenue Came in Higher Than Expected
 
Goldman posted net revenues of $9.4 billion, outpacing the Zacks Consensus Estimate of $8.7 billion. Further, it compared favorably with the year-ago number of $7.9 billion.

Key Stats to Note:

 

  • Goldman recorded highest second-quarter revenues in the last nine years and ranked first in worldwide announced mergers and acquisitions year-to-date
  • Annualized return on average common shareholders’ equity (ROE) was recorded at 13.5% for the second quarter
  • Investment Banking revenues recorded third highest quarter, recording strong net revenues in both Financial Advisory and Underwriting

What Zacks Rank Says

The estimate revisions that we discussed earlier have driven a Zacks Rank #3 (Hold) for Goldman. However, since the latest earnings performance is yet to be reflected in the estimate revisions, the rank is subject to change. While things apparently look favorable, it all depends on what sense the just-released report makes to the analysts.

(You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.)

How the Market Reacted So Far

Following the earnings release, Goldman shares were down nearly 1% in the pre-trading session. This is in contrary to what the stock witnessed in the prior-day’s session. Clearly, the initial reaction shows that the investors have not considered the results in their favor. However, the full-session’s price movement may indicate a different picture.

Check back later for our full write up on this Goldman earnings report!

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