Trimming commodity risk costs Goldman Sachs: New York Times
New York Times reports that Goldman Sachs’ efforts to hedge its bets in commodity trades, along with fixed income and currency trades, resulted in a disappointing drop in reported income in Q2.
On Tuesday Goldman reported $1.05 billion in profit in the second quarter, or $1.85 share.
Analysts were expecting $2.27 a share.
The firm substantially reduced its risk in the three months ended June 30, an overly conservative approach that cost millions in the short term, said a person with knowledge of the matter who was not authorized to speak on the record. Goldman, in part, hedged its trading activities, a move that ate into profit. It also robbed the company of the upside in certain commodities like oil, the person said.
Image of Goldman Sachs building is by Quantumquark.
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