Goldman Sachs Posts Record Quarter, but Third-Quarter Warnings Pressure Shares
Goldman Sachs reported record second-quarter revenue of $20.34 billion and EPS of $20.98, with a 23.5% return on equity, beating consensus by a wide margin. Since July, the shares have dropped about 19% after executives warned of softer fixed-income trading and higher costs for the third quarter. The bank also repurchased $4 billion of stock and raised its quarterly dividend to $5.00, with Q3 results scheduled for October 13.
Goldman's second-quarter net earnings reached $6.63 billion, with revenue climbing 39% year over year. Equities trading set a $7.4 billion record, topping Morgan Stanley's $6.3 billion, while investment banking fees contributed $3.4 billion and asset/wealth management revenue rose 20% to $4.6 billion.
The bank bought back $4 billion of stock, or 4.1 million shares, and lifted its quarterly payout to $5.00, 25% above a year earlier. After a 9% post-earnings jump, the shares later fell about 19% from July's peak amid third-quarter caution.
Goldman's results and its cooler third-quarter guidance could affect investors, employees, and clients tied to capital markets. A weaker trading and dealmaking outlook may temper bonuses or hiring, while pension funds and individual shareholders exposed to bank stocks may see sharper swings. Strong profits and buybacks may support confidence, but if activity slows, businesses seeking financing could face less favorable conditions. The October 13 update may shape how broadly financial-sector sentiment evolves.