Reuters reports that Goldman Sachs' anemic second-quarter results on Tuesday rattled investors and cast a pall on its reputation as Wall Street's trading powerhouse. The biggest U.S. investment bank reported earnings and revenue far below analysts' already-reduced expectations and year-ago levels once adjusted for a special charge. The culprit of the sharp decline was a big drop in income from fixed income, currency and commodities (FICC) trading, due to weak client activity and a sharp pullback in risk taking. That business has historically been a highly profitable one for Goldman, representing 35 to 48 percent of revenue in recent years. This quarter, it comprised just 22 percent.
"Without sugarcoating it, we did underperform during the quarter," Chief Financial Officer David Viniar told analysts on a conference call. "We are disappointed in the results."
Find out more at http://www.reuters.com/article/2011/07/19/us-goldman-idUSTRE76I0KM20110719
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