(Corrected to say earnings exceeded estimates)
Investment banking giant Goldman Sachs Group Inc. (GS) said on Monday that second-quarter profit fell 48% from a year ago, reflecting a 23% drop in net income and an increase provisions for bad debts. However, profits and revenue exceeded Street’s estimates.
In Monday’s pre-market trading, GS is currently trading at $305.02, up $11.15 or 3.79%.
For the quarter, net income attributable to common shareholders decreased 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. Analyst estimates generally exclude special items.
Provision for credit losses for the quarter was $667 million, compared to net income of $92 million last year, primarily reflecting growth in the credit card portfolio and the impact of macroeconomic concerns general.
Operating expenses were $7.65 billion for the quarter, 11% lower than a year ago, reflecting a significant decline in compensation and benefits expenses as well as net provisions for litigation and regulatory procedures.
Net revenue for the quarter fell 23% to $11.86 billion from $15.39 billion in the same quarter last year, reflecting significantly lower net revenue in asset management and investment banking. investment, partially offset by significantly higher net income in global markets and consumer and wealth management. Analysts had expected revenue of $10.88 billion for the quarter.
Investment Banking’s quarterly net income was $2.14 billion, 41% lower than a year ago, reflecting a significant decline in net underwriting income.
Global Markets net income was $6.47 billion for the second quarter, up 32% year-over-year, primarily reflecting strong performance in fixed income, currencies and commodities commodities (FICC) and equities, particularly in financing.
Asset management net revenue was $1.08 billion for the quarter, 79% lower than the prior year, reflecting net losses in equity investments and significantly lower net revenue in loans and debt investments, partially offset by a significant increase in management and other expenses.
Consumer & Wealth Management net revenue was $2.18 billion, up 25% from a year ago, reflecting a 67% increase in retail banking.
On July 14, 2022, the Board of Directors approved a 25% increase in the quarterly dividend to $2.50 per common share effective in the third quarter of 2022, payable September 29, 2022 to common shareholders of record September 1, 2022.
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