Goldman Sachs Group Inc. (NYSE:GS) made its eaarnings announcement for the first quarter of 2012 today. The company announced that it had made an earnings per share of $3.92 in the period ending in March. The company took in around $9.9 billion in revenue in the same period. According to forecasts the company had been expected to post an earnings per share of $3.55 per share taking in revenue of $9.51
The company announced earnings of $1.56 per share in the same period last year but took in a great deal more revenue in that period. The bank is growing but with the competition in investment banking which is so pronounced these days, and so many investors calling for lower fees its not the easiest time to be involved in the investment banking market. The pressures involved have shrunk revenues though a buoyant market has come to terms with that by increasing returns on trading.
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Goldman is the fourth major financial institution to report this earnings season, Wells Fargo (WFC), JPMorgan Chase (JPM) and Citibank (C) have all reported in the last week. Each of those banks showed signs of improvement in a recovering economy but none of them showed the kind of reliability across their portfolios that the market was looking for. This led to a tepid response from Wall Street even to JPMorgan and Wells Fargo’s better than expected earnings. The remaining large financials, Bank of America (BOA) and Morgan Stanley(MS), will each report on Thursday and should bring greater consensus to reports of where exactly the US economy is going.
The problems inherent in the banking sector, such as high delinquency, that have been there since 2008 seem to be slowing though perhaps not enough to assure investors that now is the time to be getting back into financial stocks. Goldman Sachs whose entire focus is on investment and trading rather than commercial banks is a different kettle of fish though its performance also gives valuable insight into an economy trying to find its feet.
Goldman Sach’s shares were up by just over 1% in pre trade this morning in anticipation of today’s earnings results. The company’s stock has been performing poorly in the last couple of weeks falling since the end of March. Yesterday was a solid day of growth for the equity however and it grew by ove 2%. Today GS will open at 117.73 hoping to make gains on a reasonable reaction by Wall Street to today’s better than expected earnings news.