Goldman Sachs (NYSE:GS) posted higher-than-expected profits and revenues for the second quarter thanks to its fixed income operations, which generated around US$700mln more in revenues than expected.
The investment banking powerhouse reported revenues of US$11.86bn, down 23% on the same period last year, but a full US$1bn higher than the US$10.86bn analysts had forecast, driven by a 55% surge in fixed income revenues.
But investment banking revenue dropped 41% to US$2.14bn, slightly above the US$2.07bn market estimate.
Profits slumped 48% to US$2.79bn or US$7.73 per share, which was well ahead of analysts' EPS forecasts for US$6.58.
Goldman shares ended Monday's session 2.5% higher, although through Friday shares had fallen 23%, worse than the KBW Bank Index's decline of 16%.
"We delivered solid results in the second quarter as clients turned to us for our expertise and execution in these challenging markets," chief executive David Solomon said in a statement.
"Despite increased volatility and uncertainty, I remain confident in our ability to navigate the environment, dynamically manage our resources and drive long-term, accretive returns for shareholders."
On a conference call with analysts, management spoke cautiously, saying hiring had slowed despite the forecast-beating results.
"Given the challenging operating environment, we are closely re-examining all of our forward spending and investment plans to ensure the best use of our resources," chief financial officer Denis Coleman told analysts.
"Specifically, we have made the decision to slow hiring velocity and reduce certain professional fees going forward, though these actions will take some time to be reflected in our results."