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Goldman Sachs (GS) Q2 Earnings Beat on High Equities Revenue
July 18, 2017

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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 $3.95, significantly beating the Zacks Consensus Estimate of $3.36. Higher net revenues in equity securities and lower expenses were primarily responsible for the 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 has declined 3.6% over the last 7 days.

However, Goldman has a decent earnings surprise history. Before posting earnings beat in Q2, the company delivered positive surprises in three of the prior four quarters. Overall, the company surpassed the Zacks Consensus Estimate by an average of 13.11% in the trailing four quarters.

Revenue Came in Higher Than Expected   
 
Goldman posted revenues of $7.89 billion, outpacing the Zacks Consensus Estimate of $7.57 billion. However, it compared unfavorably with the year-ago number of $7.93 billion.

Key Stats to Note:

  • Goldman ranked  first  in  worldwide  announced  and completed mergers  and acquisitions year-to-date and recorded highest quarterly results in two years in equities
  • Goldman repurchased 6.6 million shares of its common stock for a total cost of $1.47 billion during the quarter
  • Annualized return on average common shareholders’ equity (ROE) was recorded at 8.7%

What Zacks Rank Says

The estimate revisions that we discussed earlier have driven a Zacks Rank #4 (Sell) 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 slightly 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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