Goldman's Quarterly Profit Surges, Exceeding Analysts' Forecasts on Both Fixed Income and Equities Trading Business

Goldman's trading business provided the impetus for the company's second-quarter earnings surge.

Fixed income and equities trading outperformed analysts' expectations, while capital markets rebounded to help drive most of the Wall Street business above expectations.

However, surprisingly, Goldman earned less from merger and acquisition transactions than JPMorgan, which is unusual for Goldman, which is often the industry leader in the business and rarely trails its rivals.

Despite the growing number of companies seeking to do deals, a looming U.S. election may further delay a return to the pace of growth seen in recent years in the merger business, which is important to Goldman because it has been trying to show off its strong investment banking business and growing asset management business after giving up on expanding into consumer banking.

Goldman's second-quarter earnings were nearly triple the year-ago period, with a net of $3.04bn on revenues of $12.7bn.

The stock has risen 24% in the last year and reached a record high of $479.88 on Friday.

Fixed income trading generated $3.18bn in revenue, boosted by interest rate and currency business. Equities trading generated $3.17bn.

Investment banking revenue was $1.73bn, below the average analyst estimate of $1.8bn. M&A advisory revenue was $688m, below JPMorgan's $785m last week.

Goldman's equity capital markets business generated $423m in revenues and underwriting bond revenues of $622m.

Assets and wealth management revenues were $3.88bn, up 27% year-on-year.