Tuesday 16 July 2019 1:32 pm

Goldman Sachs beats Wall Street estimates despite profit drop

Goldman Sachs outperformed expectations on Wall Street this afternoon as a double-digit surge in investment and lending boosted the banking giant, despite a fall in quarterly profits.

Shares in the New York-based firm edged up 1.1 per cent pre-trading after it reported earnings per share of $5.81, falling from $5.98 a year earlier but beating Refinitiv forecasts of $4.89 per share.

Read more: JP Morgan beats expectations with 16 per cent rise in profits

Revenues also hit $9.46bn compared with estimates of $8.83bn.

The firm reported a six per cent drop profit amid pressure in its debt underwriting division and weaker fixed income trading activity.

Second-quarter investing and lending climbed 16 per cent year-on-year to $2.53bn.

Chairman and chief executive David Solomon, who took over from Lloyd Blankfein last year, said: “We’re encouraged by the results for the first half of the year as we continue to invest in new businesses and growth to serve a broader array of clients…Given the strength of our client franchise, we are well positioned to benefit from a growing global economy.”

Goldman is one of three megabanks posting quarterly earnings today, with JP Morgan and Wells Fargo also reporting to the market.

Read more: Citigroup kicks off Wall Street earnings season with rise in profit

Morgan Stanley, Goldman’s rival, is also set to post its quarterly performance this week.

On Monday Citigroup kicked off earnings season by beating analyst estimates for profit expectations, bolstered by gains from a listing of electronic bond trading platform Tradeweb.

Yet despite solid profit growth, weak trading revenues and squeezed lending margins casted a cloud over America’s third largest bank.

Main image credit: Getty