Goldman Sachs' profit plunges a whopping 58% in second quarter

Published

2 years ago

July 20, 2023

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Goldman Sachs on Wednesday said earnings fell by a whopping 58% in the second quarter as the Wall Street giant blamed a retreat from consumer businesses and declining investment values for its worst results in three years.

The dreadful performance still managed to fall short of Wall Street estimates — even after Goldman boss David Solomon warned analysts in the run-up to the earnings release that they should lower their expectations.

Goldman reported that it earned $3.08 a share — lower than the $3.18 analysts had predicted.

The bank’s revenue plummeted 8% to $10.9 billion, according to the report.

“This moment in the economic cycle creates meaningful headwinds for Goldman Sachs,” Solomon told analysts on a conference call. “We are making tough decisions that are driving the strategic evolution of the firm. Given both these factors, it should come as no surprise that we’re going to a period of lower results.”

Solomon did highlight seeing positive signs on the horizon in investment banking.

“It definitely feels better over the course of the last six, eight weeks,” Solomon told analysts on a conference call. “This is obviously a tough quarter,” but he added “the environment feels better.”

He cited activity picking up in equity capital markets and a revival of client discussions on mergers and acquisitions.

Goldman shares closed up 1% at $340.55.

“The bar was relatively low heading into the quarter,” wrote Citigroup analyst Keith Horowitz. “When we compare the results against our estimates, we find that core trends were generally positive,” helped by equities financing and investment banking.

The results were the bank’s worst since the second quarter of 2020, when it took writedowns over a corruption scandal linked to Malaysian state fund 1MDB.

Goldman took a $504 million hit tied to its GreenSky business, which facilitates home improvement loans to consumers, and $485 million related to its real estate investments.

Goldman agreed to acquire GreenSky for $2.2 billion in 2021 and later closed the deal at $1.7 billion.

The bank also took $615 million in credit losses including writedowns related to its consumer loans and business.

Goldman’s Marcus unit was also folded into its merged asset and wealth management arm last year, as the investment bank began pulling back from retail banking.

Goldman’s terrible quarter looked even worse compared to rivals JPMorgan Chase, Bank of America and Morgan Stanley, which all reported strong earnings in the past week.

JPMorgan announced it raked in $14 billion in profit in the second quarter despite CEO Jamie Dimons dire predictions for the economy, which has been saddled with sky-high levels of inflation in recent years.

Goldman’s results are likely to ratchet up pressure on Solomon, whose leadership and management style have been called into question by partners and rank-and-file employees.

Last month, The Post was the first to report that Goldman’s board was beginning to re-evaluate Solomon in the wake of an exodus of top talent from the Wall Street firm.

Since Solomon took the helm in 2018, Goldman partners have complained over their skimpy bonuses, his costly venture into consumer banking, and his side hustle as a DJ.

With Post wires

Technology

CoreWeave CEO says Core Scientific ‘not a need to have’ as shareholder opposition to deal rises

Published

2 hours ago

October 21, 2025

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CoreWeave CEO says Core Scientific 'not a need to have' as shareholder opposition to deal rises

CoreWeave Inc. signage in Times Square in New York, US, on Friday, May 9, 2025.

Yuki Iwamura | Bloomberg | Getty Images

CoreWeave CEO Michael Intrator told CNBC Tuesday that the firm’s proposed acquisition of Core Scientific would be a “nice to have” rather than a necessity as shareholders prepare to potentially block the deal.

In July, AI cloud provider Coreweave proposed an all-stock deal valued at around $9 billion to buy the Bitcoin miner and data center firm, Core Scientific. Immediately after the news, Core Scientific’s stock price fell, plummeting nearly 18%.

The deal has received criticism with key proxy advisor Institutional Shareholder Services (ISS) recommending on Monday that shareholders vote against the acquisition. Core Scientific’s share price has conitnued to rise after the deal was announced which suggests some investors think that the company is valued higher than what CoreWeave has offered, ISS said.

Intrator said that he was “disappointed” by the ISS report and continues to believe that the deal is “in the long-term interest of Core Scientific shareholders.” However, CoreWeave will not raise the price of the offer.

“We think that the bid that we put out there for [Core Scientific] is a fair representation of the relative value of the two companies as an all stock deal,” Intrator told CNBC. “We are going to just kind of proceed as we have, in the event that the transaction does not go through. It is a nice to have, not a need to have for us.”

“Everything has a value, and the number we put out is the value we’re willing to pay for them under all circumstances,” Intrator added.

CoreWeave CEO calls Core Scientific a 'nice to have' amid rising opposition to the acqusition

Earlier this month Two Seas Capital, a major Core Scientific shareholder publicly opposed the acquisition saying that the price CoreWeave is offering is too low. Shareholders will vote on the deal on October 30.

“We see no reason why Core Scientific shareholders should accept such an underwhelming deal. Based on recent trading data, we see little evidence that they will,” Two Seas Capital said in a Friday letter to shareholders.

CoreWeave has aggressive pursued acqusitions this year to buy AI-related firms like OpenPipe, Weights & Biases, and Monolith as it looks to expand its product offering.

The company, which has built data centers and offers Nvidia-powered computing power to hyperscalers like Microsoft, has been riding the wave of artificial intelligence investments.

“We’ve been in acquisitive mode as we continue to build and extend the functionality of our company,” Intrator said.

US

Demolition work begins on White House East Wing for Trump’s £186m ballroom

Published

3 hours ago

October 21, 2025

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Demolition work begins on White House East Wing for Trump's £186m ballroom

Demolition on parts of the White House’s East Wing has begun in order to build Donald Trump’s new ballroom.

On Monday, builders were seen tearing down the facade of the building.

The US President, who insists the $250million (£186m) ballroom will be paid for by himself and donors, said in July it would not interfere with the existing landmark.

The East Wing was built at the beginning of the last century and was last modified in 1942.

Mr Trump said in July: “It will be beautiful. It won’t interfere with the current building. It won’t be – it will be near it, but not touching it. And pays total respect to the existing building, which I’m the biggest fan of. It’s my favourite.”

Mr Trump confirmed on Monday that ground had been broken on the project, despite lacking approval for construction from the federal agency that oversees such projects.

Photos of the demolition work showed construction equipment tearing into the East Wing façade and windows and other building parts in tatters on the ground.

He added that future parties would start with cocktails in the East Room, before they are taken into the “finest” ballroom in the country.

It will also boast views of the Washington Monument with room for 999 people, he added. Other estimates have claimed it will house some 600 people.

On his social media platform, Truth Social, he said: “Completely separate from the White House itself, the East Wing is being fully modernised as part of this process, and will be more beautiful than ever when it is complete!”

Trump has also claimed on social media that the project would be completed “with zero cost to the American Taxpayer! The White House Ballroom is being privately funded by many generous Patriots, Great American Companies, and, yours truly”.

Earlier this year, Trump said they have “wanted a ballroom” in the White House for 150 years.

“There’s never been a president that was good at ballrooms,” he said. “I’m good at building things and we’re going to build quickly and on time. It’ll be beautiful, top, top of the line.”

Since being in office, Mr Trump has made a number of changes to the White House.

He has hand-picked gold ornamentation for the Oval Office and has redone the Rose Garden.

A former Republican member of Congress, Joe Walsh, called the latest plans an “utter desecration”, and said if he became president would take “a bulldozer” to the ballroom.

Technology

CNBC Daily Open: More people want the new iPhone — and Apple shares

Published

3 hours ago

October 21, 2025

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CNBC Daily Open: More people want the new iPhone — and Apple shares

Apple CEO Tim Cook holds new iPhones during an Apple special event at Apple headquarters on Sept. 9, 2025 in Cupertino, California.

Justin Sullivan | Getty Images

Critics may sneer at the iPhone 17 Pro’s fluorescent orange finish, but Apple’s “Cosmic Orange” smartphone seems to be dazzling where it counts — in sales and shares.

The newest iPhone 17 series, which includes the base iPhone 17 and its overachieving Pro and skinny Air siblings — that come in colors other than orange, to be clear — has been outselling its predecessor in the U.S. and China, according to Counterpoint Research. In China, the iPhone Air reportedly sold out within minutes of going on sale, per the South China Morning Post.

Investors noticed. Shares of Apple popped nearly 4% on the news and closed at an all-time high. That must be welcome news for CEO Tim Cook and investors for a stock that’s been trailing its Magnificent 7 peers. That brings Apple’s year-to-date gains to around 5%, compared with Nvidia’s 36% and 25% for Meta.

Another member of the Mag 7, however, had a bumpy Monday. Amazon’s cloud arm, Amazon Web Services, suffered an outage that took down sites such as Reddit and Snapchat, plunging millions, including yours truly, into existential crises. Still, Amazon shares managed to climb around 1.6%.

U.S. markets also rose more broadly, with major indexes ending Monday in the green. This week, investors will be keeping their eye on the U.S.’ trade developments with China as well as earnings reports from companies such as Netflix, Tesla and Intel — a mix that could make the next few days almost as colorful as Apple’s latest phone.

What you need to know today

And finally…

Liquid cooled servers in an installation at the Global Switch Docklands data centre campus in London, UK, on Monday, June 16, 2025.

Bloomberg | Bloomberg | Getty Images

AI set to be a boon for emerging markets — but some investors aren’t convinced

“AI will change everything for emerging markets,” said Anton Osika, CEO and co-founder of Swedish startup Lovable, which allows others to create apps and websites via prompting, removing the need for technical knowledge.

However, AI doesn’t solve structural challenges faced by emerging markets. That means plenty of points of friction still exist, such as local funding availability and confidence that startups will secure revenue, according to Emmet King, managing partner and co-founder of J12 Ventures, an investment firm.

— Tasmin Lockwood