Goldman Sachs Marches Past Estimates

Goldman Sachs Group, Inc. (GS-NYSE) posted net revenues of $12.73 billion and net earnings of $3.20 billion for its first quarter ended February 23, 2007. Diluted earnings per common share were $6.67 compared with $5.08 for the first quarter of 2006 and $6.59 for the fourth quarter of 2006. Estimates were $10.7 Billion in revenues and $4.90 EPS. 

Annualized return on average tangible common shareholders’ equity was 44.7% and annualized return on average common shareholders’ equity was 38.0% for the first quarter of 2007.  As of February 23, 2007, total capital was $169.63 billion, consisting of $36.90 billion in total shareholders’ equity (common shareholders’ equity of $33.80 billion and preferred stock of $3.10 billion) and $132.73 billion in unsecured long-term borrowings. Book value per common share was $77.12 and tangible book value per common share was $65.74, an increase of 6% and 7%, respectively, compared with the end of 2006. Book value and tangible book value per common share are based on common shares outstanding, including restricted stock units granted to employees with no future service requirements, of 438.3 million at period end.  The firm repurchased 13.0 million shares of its common stock at an average price of $207.26 per share, for a total cost of $2.69 billion during the quarter. The remaining share authorization under the firm’s existing common stock repurchase program is 39.6 million shares.

Because of the magnitude of the EPS beating and such a large revenue gap the shares are up over 1% in pre-market activity.  Bear Stearns (BSC) and Lehman (LEH) report later in the week.

Jon C. Ogg
March 13, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.