Buffett buyout hits Goldman profit
Goldman Sachs posted a steep decline in first-quarter profits, but its shares rose after the investment bank soared past Wall Street estimates.
Goldman (GS) made$2.7 billion, or $1.56 a share, for the first quarter. That compares with a year-ago profit of $3.5 billion, or $5.59 a share.
This is God's work?
Revenue fell 7% from a year ago to $11.9 billion. Analysts were expecting the firm to make 82 cents a share on revenue of $10.2 billion.
Goldman posted top-line gains in its investment banking and investment management units, cushioning the 22% revenue decline in its client services unit, which includes its fixed income, currencies and commodities business. Goldman's year-over-year revenue decline is the smallest among the big banks reporting first quarter numbers this month.
The latest-quarter profit was hit by a $1.6 billion dividend tied to Goldman's repurchase of a $5 billion investment by its financial meltdown savior, Warren Buffett's Berkshire Hathaway (BRKA).
"We are pleased with our first quarter results," said CEO Lloyd Blankfein. "Generally improving market and economic conditions, coupled with our strong client franchise, produced solid results. Looking ahead, we continue to see encouraging indications for economic activity globally."
The report comes after a string of mediocre earnings report from the other big banks, who results featured falling revenue and profits that were pumped up by the release of previously booked loan loss reserves.
Goldman shares rose 2% in early trading Tuesday but remain $30 below their level before the Securities and Exchange Commission sued the firm a year ago over its misleading marketing materials for a bubble-era debt deal.
source: cnn.com
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