Goldman posts $2.1B in earnings

ByABC News
June 18, 2008, 4:37 AM

— -- While that was a 10% decline from the previous second quarter's net, it exceeded analysts' expectations and demonstrated that it's still possible for investment banks to make money in troubled times.

"Given the difficult market conditions, we are particularly pleased to be able to report strong results for the second quarter," CEO Lloyd Blankfein said in a statement. "We are realistic about the market challenges we face, but times of market dislocation also produce opportunities, and we will continue to take advantage of the most attractive of these as they arise."

Goldman Chief Financial Officer David Viniar said the company will continue to navigate through a credit crisis that has hurt some of its competitors and caused the near-collapse of Bear Stearns.

"We're a ways through what has happened," he told reporters. "I think there is a lot of the crisis behind us, and that means there's less to come than there was."

In recent months, Wall Street has been battered by the severe downturn in the credit markets, a direct consequence of last year's bursting of the real estate bubble.

Goldman's earnings were driven by strong performances in proprietary trading and "principal investments" in companies. Investment banking results were mixed: Revenue from advisory services grew, but revenue from debt underwriting fell, reflecting a sharp reduction in merger-and-acquisition activity in the USA and abroad.

"This is a very impressive quarter on revenues, expenses and risk management," wrote Deutsche Bank analyst Mike Mayo, who has a "buy" rating on the bank.