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What to watch for in Goldman Sachs' Q2 results

The investment bank's Q2 earnings could be dependent on investment in digital banking.

Goldman Sachs logo before Goldman Sachs Q2 earnings Source: Bloomberg

Investors will see if Goldman Sachs’ Q2 earnings report could be affected by these three factors. The investment bank's results report will be released July 17.

Analysts’ diminished expectations could hurt Goldman Sachs’ Q2 revenue

After a mixed Q1 earnings report, financial experts are predicting diminished Q2 earnings. According to Zacks’ Equity Research, the investment bank’s earnings per share are expected to be $4.82, a 19.4% drop from Q1 2019. Goldman Sachs' Q2 revenue is expected to be $8.66 billion, down 7.9% from Q2 2018.

Investors will see if the lowered expectations for Goldman Sachs’ Q2 earnings will be proven correct in the bank’s results report.

Restructuring could affect Goldman Sachs' Q2 revenue

After the investment bank’s Q1 earnings report, Goldman Sachs announced that it would cut employee benefits and compensation by 20% to reduce its losses. Chief executive officer (CEO), chief executive officer, David Solomon, said that the restructuring would help the bank invest more in banking technology.

‘We are focused on new opportunities to grow and diversify our business mix and serve a broader range of clients globally,’ said Solomon.

Investors will monitor Goldman Sachs' Q2 profits to determine if the cut in employees' pay will help the bank's results.

Marcus may help Goldman Sachs’ Q2 profits

Goldman Sachs’ Q2 revenue could be helped by Marcus, the online consumer lending division. Since launching the online bank, Marcus has four million customers and $50 million in deposits. Marcus will also be part of Goldman Sachs’ partnership with Apple to launch a credit card later this year.

Adam Dell, Goldman Sachs’ head of product, said that Marcus is growing because of Goldman Sachs’ financial expertise.

‘Goldman has a great deal of expertise in financial services. We are leveraging that capability and offering that to customers at a very different price point, and a very different cost structure than incumbent banks are able to offer,’ said Dell.

Investors will look at these events to determine if they will influence Goldman Sachs’ Q2 earnings.

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