Goldman Sachs exceeds earnings estimate
Goldman Sachs Group Inc. reported a larger-than-expected profit this morning, on the heels of news that company executives have sold nearly $700 million worth of stock since the collapse of rival Lehman Bros. Holdings Inc. last year.
Goldman reported second-quarter earnings of $2.72 billion, or $4.93 per share. Analysts polled by Thomson Reuters had on average forecast earnings of $3.54 per share on revenues of $10.66 billion. Goldman recorded net revenues of $13.76 billion for the quarter, which ended June 26.
The Financial Times reported on Monday that Goldman executives sold stock worth $691 million between September 2008 and April 2009, more than the $438 million in stock sold between September 2007 and April 2008, when the average share price was substantially higher. Most of the stock sales took place while the biggest U.S. investment bank was receiving a $10 billion government bailout, according to filings with the U.S. Securities and Exchange Commission.
A Goldman Sachs spokeswoman declined to comment.
After the Lehman Bros. collapse froze financial markets, Goldman Sachs was forced to convert into a bank holding company to have access to government funding, and received $10 billion of taxpayer money. Goldman recorded a charge of 78 cents per share in the second quarter as it repaid the government’s investment.
The bank generated a record $6.8 billion in revenue from fixed-income, currency and commodities trading during the second quarter. Goldman was also able to take advantage of numerous equity offerings from other financial firms and companies as the credit and stock markets rebounded in the spring.