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Goldman Sachs’ Performance in 2015

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Performance in 1H15

Goldman Sachs (GS) reported stellar performance in 1Q15 by posting net revenues of $10.62 billion, its highest quarterly earnings in four years. Its net profits surged by 40% to $2.84 billion when compared with the first quarter of the previous year. Along with strong mergers and acquisitions activity in the first quarter, higher equity and related offerings across the globe backed this performance.

Along with strong mergers and acquisitions activity in the first quarter, higher equity and related offerings across the globe backed this performance. The company reported $5.94 in diluted earnings per share, exceeding the Wall Street consensus estimate of $4.26.

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Litigation

However, Goldman Sachs missed its 2Q15 earning estimates primarily due to higher litigation charges that were booked during the quarter. The litigation provisions caused a decline of $2.77 per share in earnings. The bank also created a provision of $1.45 billion for legal and regulatory expenses during the quarter as compared to $284 million charged in 2Q14.

The company’s 2Q15 earnings per share (or EPS) of $1.98 was much lower than the consensus expectations of $3.89. However, its revenues revenue of $9.07 billion exceeded analysts’ expectations of $8.78 billion. Its major boost came from equities, which saw 24% growth due to strong primary and secondary markets. The return on common equity for 2Q15 was somewhat low at 4.80%, whereas its Tier I Capital Ratio was at 11.80%.

In 1H15, the company’s total revenues stood at $20.34 billion with net profits of $3.9 billion. The company’s equity division has performed well in both quarters, and second-quarter revenue rose by 24% in comparison to the prior year quarter to $2 billion.

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