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Goldman crushes earnings estimates

This comes via Bloomberg:

Goldman Sachs Group Inc.’s second- quarter profit exceeded analysts’ estimates as record trading and stock underwriting led the company to its highest quarterly profit.

Net income in the three months ended June 26 was $3.44 billion, or $4.93 a share, the New York-based bank said today in a statement. That surpassed the $3.65 per-share average estimate of 22 analysts surveyed by Bloomberg and compared with $2.09 billion, or $4.58 per share, in last year’s second quarter.

This number includes a charge that if excluded would put us up well into the $5 per share range – very much in line with Meredith Whitney’s bullish call. Here’s what the Wall Street journal said.

Goldman posted income of $3.44 billion, or $4.93 a share, up from $2.09 billion, or $4.58 a share, a year earlier. The latest results included a $426 million dividend related to the company’s paying back its TARP funds. Excluding that, earnings were $5.71 a share. Net revenue jumped 46% to $13.76 billion.

The stock was down $2 in pre-market trading at 830AM ET. MarketWatch also notes a huge uptick in revenue.

Net revenues at the firm were $13.76 billion in the second quarter, compared to $9.42 billion last year. Goldman switched from a fiscal reporting schedule to a calendar schedule last year, and this year’s second quarter ended in June, while the year ago data is for the period ended May 31, 2008.

The Goldman press release is here.  What I find notable is the order in which the press release presents the earnings, with a statement on the advisory business first, followed by equities and then fixed income even though fixed income was where the most revenue and profit came.  That is revealing – and shows Goldman execs still consider the advisory business of relatively more importance from a reputational perspective.

About 

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty years of business experience. He is also a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College. Edward also writes a premium financial newsletter. Sign up here for a free trial.

3 Comments

  1. LavrentiBeria says:

    And here’s a pretty decent historical account of how these filth managed to get there, courtesy of Glenn Greenwald: http://www.salon.com/opinion/greenwald/2009/07/13/goldman/index.html Anyone still believe given AIPAC and the financial, arms and drug lobbies that we live in a democracy in the United States?

  2. BobinBethesda says:

    Any admiration of Goldman Sachs will be severely tempered by reading the recent scathing Mike Taibbi article in Rolling Stone. An interview with Taibbi is here:
    http://www.mevio.com/episode/163940/Full+Interview+with+Matt+Taibbi+of+Rolling+Stone+Magazine
    It’s a little scary – seems like we have a narco-state, only with bankers instead of drug lords.