01—Abstract
Summary
Summary of the 10-Q filed August 9, 2012. Cited figures are marked; the original filing is the authoritative source.
Goldman Sachs Group, Inc. reported net earnings of $962 milliona ($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%b year-over-year.
Goldman Sachs continued its share repurchase program, buying back $1.50 billionc 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.
02—Key points
Key Highlights
- Net earnings of $962 million for Q2 2012, a decrease from $1.09 billion in Q2 2011.
- Diluted EPS of $1.78 for Q2 2012, down from $1.85 in Q2 2011.
- Net revenues decreased by 9% year-over-year to $6.63 billion in Q2 2012.
- Significant drop in Investing & Lending net revenues to $203 million from $1.04 billion year-over-year.
- Investment Banking net revenues decreased by 17% year-over-year to $1.20 billion.
- Institutional Client Services net revenues increased by 11% year-over-year to $3.89 billion.
- Operating expenses decreased by 8% year-over-year to $5.21 billion.
- Tier 1 capital ratio remained strong at 15.0% as of June 30, 2012.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2012filed August 9, 2012Financial Statements
Q2 FY2012 against Q2 FY2011
| Line item | Q2 FY2012Q2 FY2011 | Change |
|---|---|---|
| Net Income | $962.00M$1.09B | −11.5% |
| EPS (Basic) | $1.83$1.96 | −6.6% |
| EPS (Diluted) | $1.78$1.85 | −3.8% |
| Shares Outstanding (Basic) | 501.50M531.90M | −5.7% |
| Shares Outstanding (Diluted) | 520.30M569.50M | −8.6% |
05—Questions
Frequently Asked Questions
What was Goldman Sachs' net earnings and diluted EPS for the second quarter of 2012?
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.
How did the firm's business segments perform compared to the prior year?
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.
What is the firm's capital position as of the end of the quarter?
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.
What were the key factors impacting the firm's results in the second quarter of 2012?
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.
06—Continue