Goldman Sachs Says 2Q Profits Fell
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NEW YORK (AP) _ Goldman Sachs Group Inc. Thursday reported a 2.4 percent drop in fiscal second-quarter profit, citing the effect of weak equity markets on the firm’s stock-trading and share-issuance businesses.
The New York investment bank said it remains ``cautious″ about its short-term outlook.
Net income for the period ended May 31 fell to $563 million from $577 million a year earlier, Goldman said. Earnings per share remained unchanged, at $1.06.
The results topped the 98 cents a share mean estimate of analysts surveyed by Thomson Financial/First Call.
Total revenue fell 23 percent to $6.23 billion from $8.16 billion, while net revenue, or revenue excluding interest expenses, fell 3.5 percent to $3.85 billion from $3.99 billion.
The company continues to be hurt by ``weakness in investor and executive confidence,″ Goldman chairman and chief executive Henry M. Paulson Jr. said.
Investment-banking revenue declined 3.8 percent to $762 million. The company said it saw increased mergers and acquisitions in the financial, real estate and consumer industries, which helped boost financial-advisory results.
Underwriting revenue was weighed down by fewer stock and debt issues.
Revenue from trading and principal investments dropped 15 percent to $1.44 billion. Goldman blamed lower revenue on its U.S. trading business. Some private investments also did poorly, primarily in the high technology and telecommunications industries.
Revenue from asset management and securities services rose 9.8 percent to $1.65 billion, reflecting a 13 percent increase in average assets under management, higher incentive income and increased fund-origination fees.
In Thursday morning trading on the New York Stock Exchange, shares of Goldman were at $73.65, down 80 cents, or 1 percent.