Investment banking giant Goldman Sachs (NYSE:GS) just reported its second-quarter earnings, and for the most part, the report looks quite stellar. Unfortunately, there was weakness in one key area, and shares are dropping as a result. Here's a rundown of the numbers investors need to know, and what it all means for Goldman over the long run.  

The headline numbers 

If you just look at Goldman Sachs' headline earnings and revenue numbers, the bank's second quarter looks like an absolute blowout. Earnings of $5.98 per share were well ahead of the $4.66 per share analysts had been expecting, and companywide profits were up 40% year over year.

Two stock traders looking at financial data on screens.

Trading revenue was a weak point in an otherwise strong earnings report for Goldman. Image source: Getty Images.

And unlike the rest of the big banks that have reported earnings so far, the increase wasn't almost entirely due to the benefits of tax reform. To be sure, Goldman certainly benefited from the Tax Cuts and Jobs Act's new 21% corporate tax rate, but Goldman's revenue rose by an impressive 19%. Other big banks saw revenue growth in the low to mid-single-digits, for the most part. 

Generally strong results 

Looking a little deeper, we see that Goldman delivered excellent results in almost every area of its business. We'll discuss the one somewhat-weak area in a bit, but the other three of four business segments looked great. 

Investment banking revenue was up 18% from the second quarter of 2017 and rose 14% sequentially from the first quarter. Underwriting revenue was particularly strong, up by 27%, and Goldman reported a "significantly higher" backlog of investment banking transactions than it had at the end of the first quarter. Goldman achieved the No. 1 market share for M&A, common stock offerings, and IPOs through the first half of the year. 

Investment management revenue grew by 20% year over year, and total assets under supervision grew by $15 billion, despite a slight market decline during the period.  

Investing and lending revenue soared by 23%, including a staggering 67% increase in debt securities and loan revenue. This was led by a sharp increase in net interest income. Goldman has been aggressively expanding its consumer banking services, particularly through its Marcus savings and lending platform, and it appears to be paying off nicely. 

Finally, from a profitability standpoint, Goldman's 14.1% return on equity during the first half of the year is the company's highest in nine years. 

One weak spot 

Unfortunately, Goldman did report weakness in one key area: trading. And it wasn't even that Goldman's trading revenue was that awful. In fact, Goldman slightly missed expectations for equity trading revenue, but its fixed income trading revenue beat estimates and more than made up the difference. In aggregate, Goldman's trading revenue came in just ahead of expectations. 

The reason I call it Goldman's "weak spot" is that certain peers -- particularly JPMorgan Chase -- produced trading revenue that handily exceeded expectations. Trading revenue is one of the most important parts of Goldman's business, and one area that the bank has historically been very good at, so investors tend to be disappointed when Goldman doesn't perform as well as peers. 

The Foolish bottom line 

Aside from trading, Goldman's second-quarter earnings report was excellent. Unfortunately, trading is a critical piece of the puzzle, and disappointing trading results relative to peers could certainly weigh on shares.  

Having said that, I view any weakness in Goldman as a buying opportunity. Weakness in trading revenue is likely to be a short-term headwind. Additionally, the stock currently trades for a price-to-book multiple of just 1.18, below JPMorgan, Wells Fargo, and Bank of America (a stock I also consider cheap). Plus, as I've written before, Goldman has just started to scratch the surface of its commercial banking potential, which could be a huge growth catalyst going forward.