8-KEarnings & ResultsOther EventsExhibits & Filings

GOLDMAN SACHS GROUP INC 8-K Report, Financial Results (Jul 17, 2012)

Filed July 17, 2012For Securities:GSGS-PAGS-PCGS-PDGSCE

Summary

The Goldman Sachs Group, Inc. (GS) reported its second quarter 2012 financial results on July 17, 2012. For the quarter ended June 30, 2012, the firm announced net revenues of $6.63 billion and net earnings of $962 million, translating to diluted earnings per share of $1.78. This represents a decrease from $1.85 in the prior year's second quarter and a significant drop from $3.92 in the first quarter of 2012, indicating a challenging operating environment. The results were impacted by varied performance across business segments. Institutional Client Services saw a notable increase in Fixed Income, Currency, and Commodities Client Execution revenues driven by mortgage and commodity markets, but this was offset by a decline in Equities, primarily due to lower derivative revenues. Investment Banking revenues decreased year-over-year, impacted by lower financial advisory and equity underwriting activity, though debt underwriting saw an increase. Investment Management showed positive growth in revenues and assets under management. The firm also reported a reduction in operating expenses, including compensation and benefits, and emphasized ongoing expense reduction initiatives.

Key Highlights

  • 1Q2 2012 net revenues of $6.63 billion and net earnings of $962 million.
  • 2Diluted earnings per share of $1.78, down from $1.85 in Q2 2011 and significantly lower than Q1 2012's $3.92.
  • 3Institutional Client Services net revenues increased 11% year-over-year to $3.89 billion, driven by Fixed Income, Currency, and Commodities Client Execution.
  • 4Investment Banking net revenues declined 17% year-over-year to $1.20 billion, primarily due to lower financial advisory and equity underwriting.
  • 5Investment Management revenues increased 5% year-over-year to $1.33 billion, with assets under management growing to $836 billion.
  • 6Operating expenses decreased 8% year-over-year to $5.21 billion, with compensation and benefits down 9%.
  • 7Tier 1 capital ratio stood at 15.0% and Tier 1 common ratio at 13.1% as of June 30, 2012, both showing slight increases from the prior quarter.

Frequently Asked Questions

For the second quarter ended June 30, 2012, Goldman Sachs reported net revenues of $6.63 billion and net earnings of $962 million. Diluted earnings per common share were $1.78.

Institutional Client Services showed an 11% increase in net revenues year-over-year, largely driven by Fixed Income, Currency, and Commodities Client Execution. However, Investment Banking net revenues decreased by 17%, and Equities net revenues were down 12% year-over-year, primarily impacted by lower derivative revenues. Investment Management revenues saw a 5% increase.

As of June 30, 2012, Goldman Sachs reported a Tier 1 capital ratio of 15.0% and a Tier 1 common ratio of 13.1%, both of which were slightly up from the end of the first quarter of 2012. Total shareholders' equity was $72.86 billion.

Yes, operating expenses decreased by 8% year-over-year to $5.21 billion. Compensation and benefits expenses were down 9% compared to the second quarter of 2011. The firm also highlighted ongoing expense reduction initiatives.