| |
| |
 |
| |
|
| |
|
| |
|
WASHINGTON: US banking giant Goldman Sachs took markets by surprise, announcing forecast-busting quarterly earnings and a massive US$5-billion share issue to help repay government aid.
Goldman Sachs reported first-quarter net profit of US$1.81 billion with earnings per share of US$3.39, sharply higher than US$1.33 per share forecast by most analysts.
The profit came on the back of revenues of US$9.43 billion in the first quarter, which ended on March 27.
Goldman, which reported its earnings just after the stock market close, kicked off the highly anticipated financial sector's earnings season early. It had previously scheduled its results before the stock market open Tuesday.
Investors have been on tenterhooks awaiting the latest results from financial firms reeling from the global financial and economic crisis.
US stocks staged a powerful rally Thursday, capping a fifth weekly gain, after leading bank Wells Fargo forecast a "record" US$3-billion profit in the first quarter, sparking hopes of a recovery in the sector.
The markets were closed Friday for the Easter holiday and speculation swirled that Wells Fargo's rosy outlook did not necessarily augur "green shoots" of a turnaround.
Goldman Sachs' earnings signalled the much-hoped for rebound may be at hand, analysts said.
"Goldman Sachs hits the cover off the ball," analysts at 24/7 WallStreet.com said.
"Maybe the recovery of the major banks and investment houses is not a mirage. Maybe it is the real deal," 24/7's Douglas McIntyre said.
For the 2008 fourth quarter that ended November 28, Goldman posted a net loss of US$2.12 billion.
"Given the difficult market conditions, we are pleased with this quarter's performance," Lloyd Blankfein, Goldman's chairman and chief executive, said in the statement.
"Our results reflect the strength and diversity of our client franchise, the resilience of our business model and the dedication and focus of our people."
In a separate statement after the market close, the bank announced it would put US$5 billion in common stock on the market to help it raise cash to repay a government rescue of US$10 billion.
Goldman, one of the major US banks undergoing "stress tests" by federal authorities to determine their viability, said it hoped the capital raised would allow it to repay all of the public money injected through the Treasury's Troubled Asset Relief Program.
"After the completion of the stress assessment, if permitted by our supervisors and if supported by the results of the stress assessment, Goldman Sachs would like to use the capital raised plus additional resources to redeem all of the TARP capital," the company said.
Goldman and some other financial firms have indicated in recent weeks that they want to quickly pay back the federal funds because of the government conditions affecting their management.
Its first-quarter results are not directly comparable to those of the 2008 first quarter, which ended in late February and saw net profit of US$1.51 billion.
Goldman Sachs subsequently switched from a fiscal year that ended in November to a calendar year.
The bank's net revenues in investment banking in the first quarter were US$823 million, 30 per cent lower than the first quarter of 2008 and 20 per cent lower than the fourth quarter of 2008.
Earlier Monday, Goldman said it had raised approximately US$5.5 billion from investors, including from Asia and Europe, for a fund to acquire private-equity assets.
Goldman shares fell 1.19 per cent to US$128.60 in after-hours trading, despite the announcement of a 35 cents per common share dividend. The stock had closed 4.68 per cent higher on the New York Stock Exchange at US$130.15.
JPMorgan Chase and Citigroup, other blue-chip members of the Dow Jones Industrial Average, are to report their earnings on Thursday and Friday, respectively.
- AFP/de/yb
|
