Goldman Sachs Q2 Profit Dips 48%, Misses Estimates

Investment banking major Goldman Sachs Group Inc. (GS) reported Monday that profit for the second quarter declined 48 percent from last year, reflecting a 23 percent drop in net revenues and higher provisions for bad loans. Earnings for the quarter missed analysts’ expectations, but quarterly revenues topped it.

In Monday’s pre-market trading, GS is currently trading at $305.02, up $11.15 or 3.79 percent.

For the quarter, net earnings applicable to common shareholders declined to $2.79 billion or $7.73 per share from $5.35 billion or $15.02 per share in the prior-year quarter.

On average, 21 analysts polled by Thomson Reuters expected the company to report earnings of $7.25 per share for the quarter. Analysts’ estimates typically exclude special items.

Provision for credit losses for the quarter was $667 million, compared to a net benefit of $92 million last year, primarily reflected portfolio growth in credit cards and the impact of broad macroeconomic concerns.

Operating expenses were $7.65 billion for the quarter, 11 percent lower than last year, reflecting significantly lower compensation and benefits expenses as well as net provisions for litigation and regulatory proceedings.

Net revenues for the quarter declined 23 percent to $11.86 billion from $15.39 billion in the same quarter last year, reflecting significantly lower net revenues in Asset Management and Investment Banking, partially offset by significantly higher net revenues in Global Markets and Consumer & Wealth Management. Analysts expected revenue of $10.88 billion for the quarter.

Quarterly net revenues in Investment Banking were $2.14 billion, 41 percent lower than last year, reflecting significantly lower net revenues in underwriting.

Net revenues in Global Markets were $6.47 billion for the second quarter, up 32 percent from the previous year, primarily reflecting strong performances in both Fixed Income, Currency and Commodities (FICC) and Equities, particularly in financing.

Net revenues in Asset Management were $1.08 billion for the quarter, 79 percent lower than the prior year, reflecting net losses in Equity investments and significantly lower net revenues in Lending and debt investments, partially offset by significantly higher Management and other fees.

Net revenues in Consumer & Wealth Management were $2.18 billion, 25 percent higher than last year, reflecting a 67 percent surge consumer banking.

On July 14, 2022, the Board of Directors approved a 25 percent increase in the quarterly dividend to $2.50 per common share beginning in the third quarter of 2022, payable on September 29, 2022 to common shareholders of record on September 1, 2022.

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