Trading Drags Down Profit at Goldman Sachs

Goldman Sachs report updated with additional information

• Goldman Sachs reported a profit of $1.09 billion, or $1.85 per share.
• Analysts expected net profit of $2.27 per share.
• Revenue declined 18 percent to $7.28 billion
• Goldman shares down 2.4% in premarket trading

NEW YORK (TheStreet) -- Goldman Sachs(GS) disappointed analyst expectations during the second quarter both on the topline and bottomline, as its trading division took a big hit.

The investment bank earned net income of $1.09 billion or $1.85 per share in the second quarter, compared to $613 million or 78 cents per share in the year-ago quarter. The prior period results included a $600 million payroll tax and $550 million related to the investment bank's settlement with the Securities and Exchange Commission. Excluding the impact of those items, Goldman earned $2.75 per share in the year-ago quarter.

Revenues came in at $7.28 billion, down 18% from $8.84 billion reported in the corresponding previous quarter.

Analysts were expecting the investment bank to post an earnings per share of $2.31 on revenues of $8.14 billion.

"During the second quarter, the operating environment was more difficult given global macro-economic concerns," said Lloyd C. Blankfein, chairman and CEO. "In addition, certain of our businesses had disappointing results as we reduced our market risk in response to attempting to manage fluctuations in prices and market liquidity. Despite these challenges, we continued to address our clients' needs through our strong global franchise and are well positioned to respond as economic conditions and sentiment improve."

Shares were losing 3% in premarket trading on Tuesday.

--Written by Shanthi Bharatwaj in New York

>To contact the writer of this article, click here: Shanthi Bharatwaj.

>To follow the writer on Twitter, go to http://twitter.com/shavenk.

>To submit a news tip, send an email to: [e-mail].

>To order reprints of this article, click here: Reprints