10-QPeriod: Q2 FY2012

GOLDMAN SACHS GROUP INC Quarterly Report for Q2 Ended Jun 30, 2012

Filed August 9, 2012For Securities:GSGS-PAGS-PCGS-PDGSCE

Summary

Goldman Sachs Group, Inc. reported net earnings of $962 million ($1.78 per diluted share) for the second quarter of 2012, a decrease from $1.09 billion ($1.85 per diluted share) in the same period of 2011. This decline was primarily driven by lower net revenues across most business segments, with significant decreases in Investing & Lending and Investment Banking, partially offset by an increase in Institutional Client Services. Despite a challenging economic and market environment characterized by European sovereign debt concerns and slowing global growth, the firm demonstrated resilience by managing expenses effectively, with total operating expenses down 8% year-over-year. Goldman Sachs continued its share repurchase program, buying back $1.50 billion in common stock during the quarter. The firm's capital position remained strong, with a Tier 1 capital ratio of 15.0% and a Tier 1 common ratio of 13.1% as of June 30, 2012.

Financial Highlights

31 data points
Beta

Net Income

$962.00M

EPS (Diluted)

$1.78

Total Assets

$948.64B

Free Cash Flow

$6.46B

Financial Statements
Beta
Net Income$962.00M
EPS (Basic)$1.83
EPS (Diluted)$1.78
Shares Outstanding (Basic)501.50M
Shares Outstanding (Diluted)520.30M

Key Highlights

  • 1Net earnings of $962 million for Q2 2012, a decrease from $1.09 billion in Q2 2011.
  • 2Diluted EPS of $1.78 for Q2 2012, down from $1.85 in Q2 2011.
  • 3Net revenues decreased by 9% year-over-year to $6.63 billion in Q2 2012.
  • 4Significant drop in Investing & Lending net revenues to $203 million from $1.04 billion year-over-year.
  • 5Investment Banking net revenues decreased by 17% year-over-year to $1.20 billion.
  • 6Institutional Client Services net revenues increased by 11% year-over-year to $3.89 billion.
  • 7Operating expenses decreased by 8% year-over-year to $5.21 billion.
  • 8Tier 1 capital ratio remained strong at 15.0% as of June 30, 2012.

Frequently Asked Questions

Goldman Sachs reported net earnings of $962 million, or $1.78 per diluted share, for the second quarter of 2012. This compares to net earnings of $1.09 billion, or $1.85 per diluted share, for the second quarter of 2011.

Net revenues for Institutional Client Services increased by 11% year-over-year to $3.89 billion, driven by higher net revenues in Fixed Income, Currency and Commodities Client Execution. However, net revenues in Investment Banking decreased by 17% to $1.20 billion, and Investing & Lending saw a significant drop from $1.04 billion to $203 million. Investment Management revenues saw a slight increase of 5% to $1.27 billion.

As of June 30, 2012, Goldman Sachs maintained a strong capital position with a Tier 1 capital ratio of 15.0% and a Tier 1 common ratio of 13.1%. Total shareholders' equity was $72.86 billion, and the firm repurchased $1.50 billion of common stock during the quarter.

The firm's results were impacted by a challenging global economic and market environment, including concerns over European sovereign debt and slowing economic conditions in the U.S. and China. This led to wider credit spreads, lower equity prices, and higher volatility, which affected investment banking activity and other market-making revenues. The firm also implemented cost reduction initiatives, leading to a decrease in operating expenses.