Dow Jones banking giant Goldman Sachs announced mixed Q2 earnings early Wednesday, a day after rival investment bank Morgan Stanley topped expectations. GS stock rose Wednesday.
Goldman Sachs earnings dived 48% to $3.95 per share excluding various items, the bank's seventh straight year-over-year decline. Net revenue fell 8% to $10.9 billion.
The adjusted earnings results excluded a $100 million gain from selling its Marcus unsecured loan portfolio, losses from historical principal investments within its Asset & Wealth Management business, and a $504 million goodwill impairment related to GreenSky consumer platforms. Including the impact from the three items, earnings were $3.08 per share for the quarter.
Analysts polled by FactSet expected Goldman earnings to tumble to $4.22 per share from $7.73 per share last year. Wall Street forecast a 10.5% drop in revenue to $10.61 billion.
Goldman's GAAP earnings came in at $3.08 a share, missing views for $3.16.
The results wrap up Q2 earnings for the big Wall Street financial giants.
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Goldman Sachs lowered its provision for credit losses by 8% vs. last year to $615 million for the quarter. The provisions primarily related to credit card, point-of-sale loan portfolios and individual impairments on wholesale loans, according to the release.
Global banking revenue fell 14% to $7.19 for the quarter while asset and wealth management revenue slid 4% to $3.05 billion. Platform solutions sales nearly doubled to $659 million. Net interest income rose 2.9% over the year to $1.73 billion.
On June 30, Goldman announced a 10% dividend increase to $2.75 per share starting in the third quarter after passing the Fed's annual bank stress tests.
On Tuesday, Morgan Stanley beat forecasts for its quarterly results. Earnings fell 14% to $1.24 per share while revenue rose 2.5% to $13.46 billion. FactSet analysts expected earnings of $1.19 per share on $13.02 billion in revenue.
Morgan Stanley's results included $308 million in severance costs after eliminating 3,000 jobs in June. Morgan Stanley announced its 5% headcount reduction in early May, CNBC reported.
GS Stock
Goldman Sachs shares rose about 1% Wednesday after shedding 0.5% in premarket action. GS stock eased 0.9% so far this year, but did jump 3.1% on Tuesday.
Morgan Stanley shares climbed 1.3% Wednesday after surging 6.5% Tuesday following results. MS stock gained 9.5% in 2023.
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