Buoyant fixed income profits lift Goldman Sachs earnings

Goldman Sachs reported a 23 per cent jump in second quarter earnings yesterday, boosted by trading gains from bonds, currencies and commodities, and the company more than doubled its quarterly dividend.

The investment bank said net income for the second quarter to 30 May was $695m, or $1.36 per share, compared with $563m, or $1.06 per share during the same period last year.

The results exceeded expectations. The average estimate of analysts surveyed by Thomson First Call was $1.19 per share.

Fixed-income divisions have led earnings growth on Wall Street as low interest rates, volatility in commodity and currency prices, and record mortgage refinancings create optimal trading conditions. Goldman Sachs, which had leaned heavily on its equities underwriting and mergers advising during the market boom, has adapted to the bear market by increasing its threshold for trading risk.

The bank's net revenues rose to $3.99bn from $3.85bn during the same quarter last year. Net revenues declined from $4.19bn during the first quarter of 2003.

Goldman also said that the board of directors increased its quarterly dividend to 25 cents per share, up from 12 cents.