Goldman Sachs Group (NYSE: GS) has just come out with a quarter that will please everyone.  Unfortunately, this was telegraphed by recent analyst calls with above-estimate forecasts.  The investment banking giant, a.k.a. ‘bankless’ bank holding company, posted earnings at $4.93 EPS versus $3.54 estimates on revenues of $13.76 billion versus estimates of $10.6 billion.

The huge gain came in net revenues from trading and principal investments with a 93% gain.  Investment banking was stronger than recent quarters, but down 15% from a year ago.  The big drop was in its financial advisory operations, which saw a 54% decline.

Another growth for the company was a large rise in net interest income.  This was $2.04 billion, which compares to $1.28 billion a year ago.

The company’s Tier-1 capital ratio is also listed as 13.8%.

The company also issued its book value as being $106.41 and tangible book value was $96.94 at the end of the quarter.

What is obvious here is that Goldman Sachs is living up to every bit of its expectations on how it is routinely and systematically taking money out of the markets in its trading activities.  But this was already known based upon recent reports.

Shares closed up big on the Meredith Whitney call yesterday at $149.44, and shares are fluctuating between up and down by less than a half-percent so far in the initial reaction.  The 52-week range is $47.41 to $190.04.

JON C. OGG
JULY 14, 2009

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