Goldman Sachs’ Profit, Revenue Jump

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Goldman Sachs offices in New York City last month.



Photo:

Gabby Jones for The Wall Street Journal

Goldman Sachs Group Inc.’s

GS 2.35%

profit shot higher in the second quarter, as accelerating economic growth and market gains lifted many of the Wall Street firm’s business lines.

Goldman reported quarterly profit of $5.49 billion, or $15.02 a share, on revenue of $15.39 billion. Both measures were up significantly from a year ago and better than the expectations of analysts polled by FactSet, who forecast profit of $10.25 a share.

This spring’s rapid U.S. economic recovery, helped by the rollout of Covid-19 vaccines and extensive business reopening and hiring, energized banks’ deal makers. Corporate chieftains and buyout firms put hundreds of billions of dollars to work in big-ticket acquisitions. Investors gobbled up billions of dollars of stock sold by startups in marquee initial public offerings and private fundraising rounds. Goldman’s investment bankers brought in $3.61 billion in fees in the second quarter, up 36% from last year’s second quarter.

Meanwhile, the decline in volatility from last spring’s market swoons damped activity on Goldman’s trading desk. Revenue from trading totaled $4.9 billion, down 32% from a year ago, when markets were more erratic. Still, the results were historically strong.

Goldman’s overall bottom line expanded at an especially brisk pace because of a one-time legal charge it booked a year ago. A settlement Goldman reached last summer with the government of Malaysia over its dealings with a corrupt investment fund there subtracted $2 billion from its earnings in the second quarter of 2020, making this quarter’s earnings loom large in comparison.

Shares in Goldman are up 44% since the start of 2021 and hit a record high of $391.45 in June. Last month, Goldman raised the dividend it paid shareholders to $2 from $1.25.

Write to Peter Rudegeair at Peter.Rudegeair@wsj.com

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