Print

Mail

wiki links

Despite subprime damage, Goldman Sachs can smile

Goldman Sachs Group Inc, the world's largest investment bank, yesterday reported a stronger performance in asset management and commodities, pushing first-quarter results well above Wall Street projections.

However, the investment house also showed its vulnerability to the global credit crisis.

Goldman posted net losses on residential mortgages and securities of US$1 billion, credit products produced another US$1 billion loss and investment banking returns were sluggish.

"Market conditions are clearly very difficult," chairman and chief executive Lloyd Blankfein said in a statement.

Goldman reported first-quarter earnings of US$1.47 billion after preferred dividends, or US$3.23 per share, down from US$3.2 billion, or US$6.67 per share, last year. Revenue fell to US$8.33 billion from US$12.73 billion a year earlier.

Analysts polled by Thomson Financial on average expected earnings of US$2.58 per share on US$7.47 billion in revenue. Reflecting the uncertain nature of the times, the 18 analysts reporting earnings estimates had forecast anything from US$1.95 to US$3.40 per share in profits.

Separately, Lehman Brothers said it earned US$489 million during the quarter ending Feb. 29 because of record revenue from its investment management division.

The earnings were 57 percent below last year's results, but beat analyst forecasts.

Lehman Brothers said it earned US$0.81 per share during its first fiscal quarter. Thomson Financial says Wall Street analysts expected the New York-based bank to earn about US$0.72 per share for the quarter.

The bank had posted earnings of US$1.15 billion, or US$1.96 per share, during the first quarter of 2007.
This story has been viewed 966 times.