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Actually, the second quarter was not so great for Goldman Sachs

Goldman Sachs CEO Lloyd Blankfein
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Goldman Sachs CEO Lloyd Blankfein

The headlines blared what seems like great news for Goldman Sachs, with The New York Times announcing "Quarterly Profits Double." Yet the price of Goldman's stock immediately headed down. It's off about 1.5 percent at pixel time.

What happened?

Let's start with why the year-over-year numbers don't matter. Goldman Sachs second-quarter performance might look good compared with last year, but that's largely because the same period last year was horrific for Wall Street. Revenue at Goldman in the second-quarter 2012 was down 9 percent from the prior year and 33 percent from the prior quarter. Profits were down 11.5 percent. In business after business, Goldman (along with most of its peers) got its hats handed to it a year ago.

Goldman has recovered since. But the headline numbers comparing this year to last year are totally misleading. As they say on Wall Street, the comps were easy this quarter.

If you look at Goldman's earnings report, you'll notice that there are a lot of brackets and dashes in the quarter-to-quarter comparisons. Those brackets signify a decline in business and the dashes a flat. The businesses at the core of what Goldman does just didn't grow—and they often shrank.

Check out the investment banking unit, where overall revenues fell 1 percent. Financial advisory was flat, with $486 million in revenue versus $484 million last quarter. Equity underwriting fell 5 percent, to $371 million from $390 million. Debt underwriting was flat at $695 million.

Business at the institutional client services, the unit that trades financial products for clients, contracted by 16 percent. Fixed-income, commodities and currency trading revenue fell 23 percent, to less than $2.5 billion from more than $3.2 billion.

Equities trading revenues fell 21 percent, to $638 million from $809 million. Commissions and fees for "securities services" were both up but not enough to bring the overall equities business into growth.

Investing and Lending—which Goldman swears isn't prop trading, though it does include private equity investments—saw an overall decline of 32 percent.

Over in Investment Management, Goldman had 1 percent growth, but the numbers inside that 1 percent aren't pretty. Incentive fees were down 16 percent, while management fees and transaction revenues grew. That implies that much of the growth is from having more assets under management rather than trading or investing prowess.

(Note: At posting time, Mike Mayo of CLSA had just downgraded Goldman to outperform from buy.)

Shrinking revenue in business after business is not a promising sign for Goldman's investors. And the volatility in the trading segments shows how little stability there is in the businesses that are at the very core of what Goldman does.

—By CNBC's John Carney. Follow him on Twitter @Carney

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