Goldman Sachs (GS) Easily Beats Lower Q2 Views

July 17, 2012 7:57 AM EDT
With earnings expectations being chopped 50 percent into its second quarter results, investment bank Goldman Sachs (NYSE: GS) was able to easily beat these lower numbers.

Goldman reported Q2 diluted earnings per common share of $1.78, which was down from $1.85 last year and $3.92 in the first quarter this year. Still, the results beat the Wall Street consensus of $1.13.

Revenue for the quarter came in at $6.63 billion - down 9 percent from last year and down 33 percent from last quarter. Still, the number beat the Wall Street consensus estimate of $6.28 billion.

Book value per common share and tangible book value per common share both increased approximately 2% during the quarter to $137.00 and $126.12, respectively.

Goldman's global core excess liquidity was $175 billion as of June 30, 2012. In addition, the firm's Tier 1 capital ratio under Basel 1 was 15.0% and the firm’s Tier 1 common ratio under Basel 1was 13.1% as of June 30, 2012.

Investment banking revenue fell 17% to $1.20 billion. Institutional Client Services saw revenues rise 11% to $3.89 billion, with FICC revenues rising 37% to $2.19 billion. Revenues in Investing & Lending were $203 million for the second quarter of 2012. Net revenues in Investment Management rose 5% to $1.33 billion.

Operating expenses fell 8% from last year and 23% from last quarter to $5.21 billion. The accrual for compensation and benefits expenses fell 9% to $2.92 billion, with the ration of compensation and benefits to net revenues for the first half of 2012 was 44.0%.

Shares of Goldman Sachs are up 1.8 percent to $99.41 following the news.

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