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Goldman Sachs 2Q Earnings Preview

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Goldman Sachs Group Inc (NYSE:GS) will announce its second quarter 2013 earnings before the market opens on Tuesday, July 16. The press release would possibly be made at 7:30 am. EST along with conference calls at 9:30 am EST.

In the previous earnings, Goldman Sachs Group Inc (NYSE:GS) reported results 15 minutes before the scheduled time. Goldman’s financial result has the ability to put some effect on the financial sector and market indexes.

Goldman Sachs 2Q Earnings Preview

2Q estimates

Goldman Sachs Group Inc (NYSE:GS) keeps the earning numbers pretty clear and in line with the expectations. Analysts have estimated the earnings per share to come in at $2.82 per share and will fall somewhere in the range of $2.55 to $3.17 per share. Revenue is expected to come in at $7.9 billion, an increase of 20.50 percent from the corresponding quarter of 2012. Revenue for the investment bank is expected to be in the range $7.65 billion to $8.74 billion.

Goldman Sachs stock performance

Share price of Goldman Sachs Group Inc (NYSE:GS) has gained with the recovery of the US economy and enhancement in the lending standards. Atlantic Equities has restated its Neutral rating on Goldman Sachs as it is following the declined revenues in investment banking and trading forecasts.

Shares of Goldman Sachs Group Inc (NYSE:GS) have crossed 50 days SMA, breaking off the old resistance near $150. The investment bank’s stock has already performed better than the S&P 500 in 2013. Post earnings, if the stock moves upside then it will first try to cross the initial resistance of $165, and then $168.20 that is the recent high. On the other hand, if the earnings are low then the target for support will be at $165 and then $150, followed by $142.50.

New leverage ratio may pose hurdle

A new leverage ratio has been imposed by the financial regulators on the topmost financial institutions according to which the institutions need to increase capital leverage ratio from 3 percent to 5 percent of assets. According to Bezinga.com, Goldman Sachs Group Inc (NYSE:GS) will have to increase its capital by $5 billion to fulfill the new condition. In order to meet the new norms, Goldman Sachs might have to sell assets, decrease or eliminate payout ratio, or it can decrease share buyback.

Despite the new capital standards, “the price action of the industry has remained positive” and the news has already been factored in the share price, says a report from Seeking Alpha by Todd McDonald. Overall, experts and analysts are expecting a solid report from Goldman.

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Aman Jain
Personal Finance Writer

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