Goldman Sachs... Earnings in Golden Slacks (GS, BRK-A)

Goldman Sachs Group Inc. (NYSE: GS) managed to beat earnings expectations this Tuesday.  The bank holding company without a bank reported earnings of $ 1.56 EPS and revenues fell 6.9% to $11.89 billion.  Thomson Reuters had estimates of $0.82 EPS and $10.18 billion in revenue. 

Investment Banking revenues were up 5% year over year and down 16% sequentially at $1.27 billion.  Financial Advisory revenues were down 23% at $357 million, while Underwriting grew 23% to $912 million. 

Institutional Client Services revenues were down 22% year over year but up some 80% sequentially to $6.65 billion.  Fixed Income, Currency and Commodities Client Execution revenues were down 28% year over year to $4.33 billion.

Operating expenses were up about 3% year over year and up about 50% sequentially to $7.85 billion, but that huge jump looks tied to annual performance and bonuses paid. The accrual for compensation and benefits expenses was down 5% from a year ago at $5.23 billion, while the ratio of compensation and benefits to revenues was 44.0%.

The firm managed to post a small gain in book value versus the end of 2010 despite a large payback to Berkshire Hathaway Inc. (NYSE: BRK-A).  Book value per common share was $129.40 and tangible book value per common share was $119.63.  Goldman Sachs shares closed at $153.78 Monday against a 52-week trading range of $129.50 to $175.34.  Shares are indicated up 1.6% at $156.25 on more than 500,000 shares in the pre-market.

JON C. OGG