Goldman Sachs 2Q Profit Edges Higher
Thursday June 14, 10:33 am ET
Goldman Second-Quarter Profit Edges Higher Amid Mortgage, Commodities Slowdown
NEW YORK (AP) -- Goldman Sachs Group Inc., the nation's largest investment bank, on Thursday reported second-quarter results edged slightly higher, with profits squeezed by a slowdown in its mortgage business.
Profit after paying preferred dividends rose to $2.29 billion, or $4.93 per share, from $2.29 billion, or $4.78 per share, a year earlier.
Despite a strong performance in its investment banking and asset management businesses, revenue slipped to $10.18 billion from $10.24 billion a year earlier.
Results topped Wall Street projections for earnings of $4.79 per share on revenue of $10.16 billion, according to analysts polled by Thomson Financial.
Shares fell $6.50, nearly 3 percent, to $227.12 in early trading Thursday as investors were rattled by yet another quarter of weakness in Goldman's mortgage business. Goldman, along with other U.S. investment banks, buy mortgages and then repackage them as securities -- a business that has been hurt by a slide in the subprime market.
Goldman's revenue from fixed-income, currencies and commodities -- which is the investment bank's biggest business -- dropped 24 percent to $3.37 billion. There was weakness in both interest-rate sensitive credit products, and a mortgage business hurt by "continued weakness in the subprime sector."
Investment banking revenue climbed 13 percent to $1.72 billion. Goldman consistently ranks among the world's biggest advisers on takeovers.
Record levels for stocks, with both the Dow Jones industrials and Standard & Poor's 500 index, pushed equity trading revenue 6 percent to $2.5 billion.
Asset management and securities services, which includes the firm's prime brokerage business, rose 13 percent to $1.81 billion.
|
