Goldman Sachs posts earnings beat as traders outpace estimates

investmentnews.com:

Goldman Sachs Group Inc.’s trading unit powered a surge in earnings in the second quarter.

Both fixed-income and equity traders outpaced analysts’ estimates, while a rebounding capital-markets business helped drive better-than-expected results across much of the company’s Wall Street operations.

Still, in a surprise reversal, the company pocketed less in fees from arranging mergers than JPMorgan Chase & Co. Goldman tends to lead the industry in that business and rarely falls behind its rival.

Even as more businesses are on the prowl for deals, the approaching US elections could further delay a return to the pace of growth in the mergers seen in recent years. The business is especially important for Goldman because the firm has tried to showcase its strong investment bank and growing asset-management operation, after abandoning an expansion into consumer banking.

Earnings in the second quarter were 2.5 times higher than what Goldman posted a year ago, when it was plagued by losses in real estate investments and the consumer-banking unit in the middle of an industrywide dealmaking slowdown. Net income was $3.04 billion on $12.7 billion in revenue in the three months through June 30, according to a statement Monday.

Shares of the New York-based company advanced 24% this year, propelling the stock to an all-time high of $479.88 on Friday. They were little changed in early New York trading Monday.

Last month, in a surprise move, the bank tapped John Mahoney, a financial-services banker who has been with the firm since 1987, to oversee firmwide strategy. That’s a departure from recent years, when Goldman had been tapping younger, fast-rising executives destined for bigger jobs at the firm for a similar role. The firm is also