Wednesday, July 15, 2009

goldman sachs earnings easily surpass expectations

Washington Post | Goldman Sachs yesterday reported the largest quarterly profit in its history as a public company, $3.44 billion between April and June, as the decimation of its Wall Street rivals allowed the investment bank to romp across the financial landscape, buying low and selling high.

The New York firm is only months removed from a federal rescue that included emergency approval to become a bank holding company, $10 billion in direct federal aid and help to borrow billions more to finance its operations. But Goldman's earnings of $4.93 a share, up from $4.58 during the comparable period last year, made clear that the company has emerged stronger than other survivors, allowing it to seize opportunities in the aftermath of the crisis.

The results may cheer investors, offering further evidence that the strongest financial companies can once again be trusted to generate massive profit. Goldman's stock closed basically flat yesterday at $149.66, but its share price has climbed 77 percent this year.

Goldman's success also risks a political backlash, as the company is now on track to pay record bonuses in the midst of a recession that many Americans -- including President Obama -- have blamed in part on Wall Street's lavish pay practices. Goldman said yesterday that it set aside 48 percent of its total revenue, or $6.65 billion, to reward employees for the company's performance. That share is the same as Goldman set aside in 2007, before the crisis.

0 comments: