Goldman Sachs Group Inc. plans to cut $500 million of expenses this year, mostly from compensation, after reporting the lowest first-half revenue and earnings in seven years.
“We’re controlling the levers that we can, which are expenses and capital,” chief financial officer David Viniar, 56, said Tuesday on a conference call with analysts.
Chief executive Lloyd Blankfein, 57, who has run the company for six years, cut 3,200 jobs in the past 12 months to contend with a slowdown that he said was a temporary reaction to the 2008 financial crisis. After revenue in all of the firm’s businesses fell in the first half of 2012, the company is adding new cost cuts to the $1.4 billion achieved since last year, Viniar said.
Second-quarter net income slid to $962 million, or $1.78 a share, in the three months through June 30, from $1.09 billion, or $1.85, a year earlier, New York-based Goldman Sachs said Tuesday in a statement.
Earnings beat the highest estimate among 25 analysts surveyed by Bloomberg, boosted by a gain in asset-management revenue. Goldman Sachs, the fifth-biggest U.S. bank by assets, climbed 0.3 percent to $97.98 in New York trading. The company bought back $1.5 billion of shares during the quarter, it said Tuesday.
“They are managing well in a difficult environment,” Thomas Brown of Second Curve Capital, said.
“It’s still low profitability.”
