Goldman Sachs Group, Inc. | $GS Stock | Shares Slump Despite Profit & Revenue Jump

Goldman Sachs logo
FILE PHOTO: The Goldman Sachs company logo is seen in the company's space on the floor of the New York Stock Exchange, (NYSE) in New York, U.S., April 17, 2018. REUTERS/Brendan McDermid

Goldman Sachs Group, Inc. (NYSE:GS)


Goldman Sachs reported remarkable second-quarter financial results before the opening bell on Tuesday. The upbeat performance saw GS stock rise slightly in the early hours of regular trading, before losing the gains later.

Separately, the lender announced David M. Solomon as its next CEO, taking over from Lloyd C. Blankfein who has led the company for twelve years.

Mr. Solomon is expected to steer the Wall Street bank into a new era as it revamps familiar businesses and diversifies into new ones. The new chief executive is expected to assume office on October 1.

GS Earnings & Outlook

Earnings rose to $2.35 billion, or $5.98 per share, compared with $1.63 billion, or $3.95 per share, in last year’s second quarter. Revenue jumped from $7.89 billion in the year period, to $9.40 billion.

Analysts had modelled $4.65 on earnings per share for revenue of $8.70 billion. Net interest income exceeded estimates of $869.7 million after rising to $1.00 billion from $788 million in the same period last year.

The company’s Institutional Client Services segment recorded revenue of $3.57 billion, up 17% but below expectations of $3.63 billion. Revenue from fixed income, currency and commodities beat estimates after jumped 45%.

Goldman Sachs CEO Comments

While announcing the appointment of his successor, Blankfein issued the following remarks: “David is the right person to lead Goldman Sachs. He has demonstrated a proven ability to build and grow businesses, identified creative ways to enhance our culture and has put clients at the center of our strategy. Through the talent of our people and the quality of our client franchise, Goldman Sachs is poised to realize the next stage of growth.”

Goldman Sachs Group, Inc. Company Profile

Goldman Sachs Group offers investment management, securities, and investment banking services internationally.

The company operates through the following segments: Investment Banking, Investment Management, Institutional Client Services, and Investing & Lending.

The Investment Banking segment offers financial advisory services, such as strategic advisory assignments related to restructuring, risk management, acquisitions and mergers, divestitures, spin-offs, and corporate defense activities.

It also offers underwriting services, including equity and debt underwriting of private placements and public offerings of various securities.

Further, the segment offers derivative transactions to private and public sector clients.

The Institutional Client Services segment engages in client execution activities related to making markets in derivative instruments and cash for interest rate products, currencies, credit products, equities, mortgages, and commodities.

This segment also provides securities services comprising securities lending and financing, as well as other prime brokerage services.

The Investing & Lending segment originates and invests in long term loans to offer financing to clients.

In addition, it makes investments in loans and debt securities, private and public equity securities, as well as real estate and infrastructure entities.

It also provides secured and unsecured loans to retail clients via its digital platforms.

The Investment Management segment provides investment management services and products. Additionally, it offers wealth advisory services comprising of brokerage, financial counselling and planning, and portfolio management and other transaction services.

Goldman Sachs Group, Inc. serves financial institutions, corporations, individuals, and governmental agencies. The company was founded in 1869 by Marcus Goldman. Its headquarters are located in New York, NY. –Reuters