Goldman Sachs Sails Past Lowered Estimates (GS)

Goldman Sachs (NYSE: GS) has just posted earnings, and while many metrics are lower than last year the results overall were well above estimates that had been lowered in a weakening environment.  The company earned $1.51 Billion on $8.34 Billion in revenues.  On an EPS basis it posted $3.23.  First Call had earnings estimates at $2.58 EPS and $7,47 Billion in revenues.

Its annualized return on average tangible common shareholders’ equity (1) was 17.0% and annualized return on average common shareholders’ equity was 14.8% for the first quarter of 2008.  Individual unit numbers were as follows:

• Fixed Income, Currency and Commodities generated quarterly net revenues of $3.14 billion;
• Equities produced quarterly net revenues of $2.51 billion;
• Assets under management increased 21% from a year ago to a record $873 billion;
• Securities Services net revenues grew 38% to $722 million;
• Investment Banking revenues fell 32% to $1.17 billion;
• Financial Advisory fell 23% to $663 million.

Goldman Sachs also listed its total capital as $222.11 billion, which was $42.63 billion in total shareholders’ equity and $179.48 billion in unsecured long-term borrowings. Its stated book value per common share was $92.44 and its tangible book value per common share was $80.28.  As far as its share buyback plan, it repurchased roughly 7.9 million shares of its common stock at an average cost of $198.87 per share for some $1.56 billion during the quarter.  There were some charges in the numbers.  It lost $1 Billion on non-investment grade credit origination and on residential mortgage loans and securities.

Goldman Sachs shares closed down $5.84 to $151.02 yesterday and shares are indicated up $7.00 to above $158.00 in pre-market trading; its 52-week trading range is $140.27 to $250.70.

Jon C. Ogg
March 18, 2008