Going into Goldman Sachs Earnings
22:18 America/Los_Angeles 12 Jul 2009 
2 Comments
This upcoming Tuesday morning (7-14-09) Goldman Sachs will be releasing their earnings for Q2 2009. This will be the kickoff event for a slew of financials that will be reporting this week and next. The importance of these earnings cannot be overblown in that the overall market basically lies in the hands of these financial earnings. The market always has and always will follow the financial sectors lead.
Goldman Sachs is expected to post a profit of $3.42 a share, down from $4.58 a share a year earlier. Analysts predict Goldman will post the best quarter-on-quarter increase in investment-banking revenues compared with rivals, with stronger fee income, especially from debt and equity underwriting, as the main earnings driver.
Everyone knows that with all the government hand holding this has been a easy money making environment for the financials, but the question is whether their success due to the hand holding justifies a 199% gain (Calculated from GS’s November low $47.41 to this past Fridays closing price $141.87)
Below is a chart showing the earnings trend of GS:
Below is a dynamic chart of Goldman Sachs vs. competitors in Net Income you can adjust the time frame as you wish:
Click on the Full Post link to view the other charts including another dynamic chart with GS fundamentals and technical charts showing some interesting information.
Technical Chart showing the GS run and its current start into a downtrend and its precarious position sitting right on the 50 day moving average.
A technical chart that I thought was interesting is below. Its a 3 year monthly chart of GS. It has the 25 and 50 day moving average and slow stochastics. Whats interesting is how well the moving averages have held up as resistance and also how high the stochastics are at this point. The stochastics on the monthly chart haven’t been this high since 2007 … suggesting a highly overbought condition with a higher probability of price retraction that could last for an extended period of time.
A dynamic chart showing GS Income Statement information:
Looks like the boys are getting the pumping started early today!
Goldman reported a net income for common shareholders of $2.7 billion, or $4.93 a share. That compares with $2.05 billion, or $4.58, in the quarter ended May 30, 2008, before the bank switched to a calendar-year reporting schedule.
Analysts on average had forecast earnings of $3.49 a share, according to Reuters Estimates.
As expected they blew out earnings, but the important thing to note is the stocks reaction, which has been see sawing all day and is pretty much flat….. looks like a little sell the news.