From New York City early Tuesday, Goldman Sachs (NYSE:GS) reported quarterly earnings per share of $1.78, which shattered estimates by 50 cents per share (51 percent), and overall revenue was $6.62 billion, which beat estimates by $340 million (5 percent). Shares of GS stock spiked more than 2 percent prior to Tuesday’s open, and halfway through the tradings day the stock was up another 40 cents to just north of $98 per share.
The EPS for the quarter was down about 4 percent from the same period in 2011 and was nearly half of the first quarter of 2012 figure. Net investment banking revenue was off 17 percent year-over-year to $1.2 billion, financial advisory revenue was down 26 percent to $469 million, underwriting revenue was down 9 percent to $734 million and equities revenue was off 12 percent to $1.7 billion.
On the other side of the coin, institutional client revenue was up 11 percent to $3.89 billion over Q2 2011, fixed income, currency and commodity (FICC) revenue was up 37 percent to $2.19 billion, and investment management revenue was up 5 percent to $1.33 billion. Operating expenses fell 8 percent to $5.21 billion.
In the press release announcing the earnings, CEO Lloyd C. Blankfein said, “During the second quarter, market conditions deteriorated and activity levels for both corporate and investing clients were lower given continued instability in Europe and concerns about global growth. Still, we remain focused on meeting our clients’ needs, while prudently managing our capital, liquidity and risk.”
Though the number are mixed in general, with the key numbers blowing past estimates, the stock moved upward Tuesday and some prominent hedge funds will likely benefit, including Boykin Curry’s Eagle Capital Management and Phill Gross and Robert Atchinson’s Adage Capital Management. At the end of Q1 of 2012, Eagle had $403 million invested in Goldman (increasing its stock holding by 5 percent in the quarter), while Adage was in for $180 million by the end of March (and had increased its share o stock by more than 250 percent during Q1). Ken Griffin’s Citadel Investment Group upped its stock share by 59 percent during the first quarter to claim a stake of nearly $131 million.