We are covering all earnings analysis and cheat sheets as they come. Earnings from banks and investment firms are usually the most anticipated ones. Credit Suisse Group AG (ADR) (NYSE:CS) has detailed a comprehensive guidance on what can be expected from a number of banks, investment firms, and asset managers, based on what they estimated themselves in their previous quarterly earnings . The fine points of the report can be a standard against which the future Q3 or Q4 earnings are compared to. We are starting off with the major banks first:
Morgan Stanley (NYSE:MS)
When it comes to finding future business champions, Warren Buffett and Charlie Munger have really excelled over the past seven decades. Q3 2021 hedge fund letters, conferences and more One could argue that these two individuals are some of the best growth investors of all time, thanks to their ability to spot companies like Coca-Cola Read More
In Morgan Stanley (NYSE:MS)‘s September 12 conference, $300 million in annual savings were announced, and in the long term, MS expects to save $30 million each quarter through software amortization. In the second half of 2012, a 7 percent decrease in headcount was made, by laying off 700 employees. In terms of sales, the bank expects to achieve returns in the mid teens in the long term.
Goldman Sachs Group, Inc. (NYSE:GS)
The Q2 earnings call estimated an additional $500 million cuts in expenses by the end of 2012, which will take the year to date savings to $1.9 billion.
In Retail Discount Brokerage Firms, the reports gives guidelines on:
Charles Schwab Corp (NYSE:SCHW)
At the end of Q2 2012, Charles Schwab announced a 6.25 percent Bank Tier 1 Leverage ratio, which is down from 7.5 percent. The expectation is 20 percent L/T ROE, in case of an improved interest rate environment.
TD Ameritrade Holding Corp. (NYSE:AMTD)
In revenues, the estimate given for FY2012 was $2.6-3.0 billion. The guideline for net interest margin was 1.70-1.85 percent, while average commission was estimated at $11.70-12.20 for 2012. The expenses would be $1.7-1.8 billion, out of which advertising expenses would be $245-285 million for FY2012. The return on equity is expected to be 16 percent, while the firm would accumulate $26.5-41.7 billion in new assets, by the end of 2012. The guideline for diluted earnings per share was $1.00-1.35.
In the category of Alternative Asset managers, a couple of the funds that were mentioned:
The Blackstone Group L.P. (NYSE:BX)
Till July, Blackstone had raised $12 billion in capital, and expected to close the year with $13.3 billion. Blackstone was expanding its investments in single family housing in post-foreclosed homes. Two-thirds of the rescue lending fund was invested, and a successor fund was being raised. BLK had no plans to initiate buybacks and expected slow growth over the next quarters in its Q2 earnings call.
The Carlyle Group LP (NASDAQ:CG)
In its Q2 earnings call, the asset manager expected closes in Asia and Global Market Strategies in the second half of 2012. It expressed concerns over how fund raising takes longer in new strategies, an average PE fund now takes 17 months to raise, as compared to 9 months in 2004.
Carlyle was going to complete 6 investments, with a minimum commitment of $1.6 billion in equity, in the first six weeks of Q3. Carlyle’s distressed funds were doing well till the end of Q2.
OakTree Capital Group LLC (NYSE:OAK)
Howard Marks’ Oaktree targets are, $1.5 billion in enhanced income, $1.5 billion in RE opportunities, and $4.9 billion in investment opportunities. The emerging markets debt fund is expected to begin raising by the end of 2012. The net incentive income is expected to equal $6 million for Q3 and $16 million for Q4. Oaktree is focusing on CRE for directing further investments.