Did New Goldman Sachs CEO News Overshadow Earnings?
Goldman Sachs Group released better-than-expected quarterly results before the markets opened on Tuesday.
When Goldman Sachs Group Inc. (NYSE: GS) released its most recent quarterly results before the markets opened on Tuesday, the investment bank said that it had $5.98 in earnings per share (EPS) and $9.40 billion in revenue. Consensus estimates had called for $4.66 in EPS and revenue of $8.74 billion. The same period of last year reportedly had EPS of $3.95 and $7.89 billion in revenue.
Perhaps the biggest announcement in the report is that David Solomon will be taking over the role as chief executive officer effective October 1, 2018. Investors had a chance to react to this news on Monday before earnings came out and promptly sent the stock up about 2%.
During the quarter, Goldman Sachs noted a book value per common share of $194.37 and tangible book value per common share of $183.78. Also, the firm’s Basel III Advanced common equity tier 1 ratio was 11.5% at the end of the quarter.
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In terms of its segments the company reported as follows:
- Net revenues in Investment Banking were $2.05 billion for the second quarter of 2018, 18% higher than the second quarter of 2017 and 14% higher than the first quarter of 2018.
- Net revenues in Institutional Client Services were $3.57 billion for the second quarter of 2018, 17% higher than the second quarter of 2017 and 19% lower than the first quarter of 2018.
- Net revenues in Investing & Lending were $1.94 billion for the second quarter of 2018, 23% higher than the second quarter of 2017 and 7% lower than the first quarter of 2018.
- Net revenues in Investment Management were $1.84 billion for the second quarter of 2018, 20% higher than the second quarter of 2017 and 4% higher than the first quarter of 2018.
The investment bank did not offer guidance for the third quarter, but the consensus estimates are $5.22 in EPS and $8.36 billion in revenue.
Lloyd Blankfein, board chair and current CEO, commented:
Solid performance across all of our major businesses drove the strongest first-half returns in nine years. With a healthy economic backdrop and deep client franchises, the firm is well-positioned to invest in attractive opportunities to meet the needs of our clients and continue to generate earnings growth.
Shares of Goldman Sachs traded down more than 1% to $228.44 early Tuesday. The consensus price target is $271.50 and a 52-week range of $214.64 to $275.31.
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Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics. Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications. A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.
