Goldman Sachs' second-quarter earnings bombed. Here are 5 numbers that best explain what went wrong and where the company is headed.
David Solomon said it's the result of the bank's"journey" toward more diversified and stable revenue streams.
The bank reported significantly lower profit, down 58% to $1.2 billion, as it shifts away from its ill-fated move into consumer banking amid an industry-wide slump in M&A and IPOs. Goldman reported earnings per share of $3.08, below the $3.16 per share that some analysts expected. "This moment in the economic cycle creates meaningful headwinds for Goldman Sachs and our business mix. At the same time, we are making tough decisions that are driving the strategic evolution of the firm," said Solomon in the call."Given both these factors, that should come as no surprise that we're going to a period of lower results. I remain fully confident that we will deliver on our through-the-cycle targets of mid-teens returns at significant value for shareholders.
Here are the five numbers explaining the complex story of Goldman Sachs' second-quarter earnings and its shift from consumer banking to asset management fees. Goldman's second-quarter earnings were dragged down by $485 million in impairments related to real estate investments made via its asset management unit, including those tied to properties it sold. The company broke down its exposure to office properties, which have struggled from the rise of remote work.
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