Goldman Sachs Q2 Profit Tops View; Hikes Dividend
Goldman Sachs Group Inc. (GS) Tuesday reported a profit for the second quarter of 2021 that climbed from last year. Net provisions for litigation and regulatory proceedings in the prior year reduced earnings per share by $8.23 for the second quarter of 2020. Quarterly earnings per share topped analysts’ expectations. Net revenues increased 16 percent from the prior year.
The company’s board approved a 60% increase in the quarterly dividend to $2.00 per share beginning in the third quarter of 2021. The dividend will be paid on September 29, 2021 to common shareholders of record on September 1, 2021.
The company reported that its second-quarter net earnings applicable to common shareholders surged to $5.35 billion or $15.02 per share from $197 million or $0.53 per share in the same quarter last year. Analysts polled by Thomson Reuters expected the company to report earnings of $10.23 per share for the second-quarter. Analysts’ estimates typically exclude special items.
Provision for credit losses was a net benefit of $92 million for the second quarter of 2021, compared with net provisions of $1.59 billion for the second quarter of 2020. The latest-quarter included reserve reductions on wholesale and consumer loans reflecting continued improvement in the broader economic environment following challenging conditions that began in the first half of 2020 as a result of the COVID-19 pandemic, partially offset by provisions related to portfolio growth.
Net revenues for the second quarter of 2021 were $15.39 billion, 16 percent higher than the second quarter of 2020, reflecting significantly higher net revenues in Asset Management, Investment Banking and Consumer & Wealth Management, partially offset by significantly lower net revenues in Global Markets. Analysts expected revenues of $12.17 billion for the second-quarter.
Net revenues in Investment Banking for the quarter were $3.61 billion, 36 percent higher than the prior year, due to significantly higher net revenues in Financial advisory and Corporate lending and higher net revenues in Underwriting.
Net revenues in Global Markets were $4.90 billion for the second quarter of 2021, 32% lower than a strong second quarter of 2020.
Quarterly net revenues in Asset Management were $5.13 billion, more than double the amount in the previous year.
Net revenues in Consumer & Wealth Management were $1.75 billion for the second quarter of 2021, up 28 percent from the prior year.
In Tuesday pre-market trading, GS was trading at $383.44 up $2.94 or 0.77 percent.
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