Goldman Sachs Group, Inc. (GS) Posts Q2 EPS of $4.10

Goldman Sachs Group, Inc. (NYSE: GS) reported Q2 EPS of $4.10, $1.01 better than the analyst estimate of $3.09. Revenue for the quarter came in at $9.13 billion versus the consensus estimate of $7.98 billion.

Highlights

• Goldman Sachs continued its leadership in investment banking, ranking first in worldwide announced and completed mergers and acquisitions for the year-to-date. (2) The firm also ranked first in worldwide equity and equity-related offerings, common stock offerings and initial public offerings for the year-to-date. (2)
• Underwriting produced record quarterly net revenues of $1.28 billion, including record net revenues in debt underwriting.
• Investment management generated record quarterly management and other fees of $1.20 billion, as assets under supervision increased to a record $1.14 trillion.
• Book value per common share and tangible book value per common share (3) both increased approximately 2% during the quarter to $158.21 and $148.45, respectively.
• The firm continues to manage its liquidity and capital conservatively. The firm’s global core excess liquidity (4) was $170 billion (5) as of June 30, 2014. In addition, the firm’s Common Equity Tier 1 ratio (6) was 11.4% (5) as of June 30, 2014, under the Basel III Advanced approach. Total assets decreased $56 billion to $860 billion (5) as of June 30, 2014, resulting from a firmwide initiative to reduce activities with lower returns, including certain client secured financing activities.

“We are pleased with our results for the quarter in the context of mixed operating conditions during the period,” said Lloyd C. Blankfein, Chairman and Chief Executive Officer. “This performance was driven by the diversity, strength and breadth of our global client franchise. Good client activity in Investment Banking and Investment Management as well as a better environment for our Investing & Lending activities helped offset less favorable conditions for Institutional Client Services.”

Capital

As of June 30, 2014, total capital was $248.65 billion, consisting of $81.63 billion in total shareholders’ equity (common shareholders’ equity of $72.43 billion and preferred stock of $9.20 billion) and $167.02 billion in unsecured long-term borrowings. Book value per common share was $158.21 and tangible book value per common share (3) was $148.45, both approximately 2% higher compared with the end of the first quarter of 2014. Book value per common share and tangible book value per common share are based on common shares outstanding, including restricted stock units granted to employees with no future service requirements, of 457.8 million as of June 30, 2014.

On April 28, 2014, the firm issued 28,000 shares of perpetual 6.375% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series K, for aggregate proceeds of $700 million, and 52,000 shares of perpetual 5.70% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series L, for aggregate proceeds of $1.30 billion.

On July 14, 2014, the Board of Directors of The Goldman Sachs Group, Inc. declared a dividend of $0.55 per common share to be paid on September 29, 2014 to common shareholders of record on August 29, 2014.

During the quarter, the firm repurchased 7.8 million shares of its common stock at an average cost per share of $160.89, for a total cost of $1.25 billion. The remaining share authorization under the firm’s existing repurchase program is 39.1 million shares. (11)

The firm’s Common Equity Tier 1 ratio (6) was 11.4% (5) as of June 30, 2014, under the Basel III Advanced approach reflecting the applicable transitional provisions. The firm’s Common Equity Tier 1 ratio under this approach was 11.3% as of March 31, 2014.

Other Balance Sheet and Liquidity Metrics

• Total assets were $860 billion (5) as of June 30, 2014, down $56 billion from March 31, 2014, resulting from a firmwide initiative to reduce activities with lower returns, including certain client secured financing activities.
• The firm’s global core excess liquidity (GCE) (4) was $170 billion (5) as of June 30, 2014 and averaged $173 billion (5) for the second quarter of 2014, compared with an average of $181 billion for the first quarter of 2014.
• Level 3 assets were $40 billion (5) as of June 30, 2014, compared with $41 billion as of March 31, 2014, and represented 4.6% of total assets.

For earnings history and earnings-related data on Goldman Sachs Group, Inc. (GS) click here.

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