Earnings Preview: Goldman Sachs
Monday March 13, 1:42 pm ET
Goldman Sachs First-Quarter Profit Seen Led by Investment Banking Fees
NEW YORK (AP) -- Securities firm Goldman Sachs Group Inc. reports earnings for the fiscal first quarter before the market open on Tuesday, March 14. The following is a summary of key developments and analyst opinion related to the period.
EXPECTATIONS: Analysts, on average, project the New York-based from will report a profit of $3.29 per share on revenue of $7.19 billion, according to Thomson Financial.
ANALYST'S TAKE: "Goldman Sachs closed $198 billion in mergers and acquisitions in the first quarter, up 63 percent from $121 billion last quarter," said Wachovia analyst Douglas Sipkin, who believes revenue from M&A fees could approach $600 million during the period. "The combination of performance fee anniversary dates in the first quarter, as well as seasonally lower non-compensation costs, only augment the fact that the first quarter should be a solid quarter for Goldman Sachs."
QUARTER DEVELOPMENTS: Bankers at Goldman have been quite active during the quarter. The firm is preparing to lead MasterCard Inc. through a public flotation on the New York Stock Exchange during the second quarter. Goldman is expected to post millions of dollars in fees from the initial public offering, which is expected to raise about $2.5 billion.
Goldman is also expected to profit from its investment in Burger King Holdings Inc. The firm's buyout unit -- GS Capital Partners -- joined two other private equity firms that acquired the fast food chain for about $1.5 billion in 2002. The Miami-based restaurant company is expected to go public this year, and is expected to raise about $400 million.
COMPETITORS: The rally behind top U.S. securities firms has continued during the quarter as analysts have predicted robust capital markets and investment banking will fuel quarterly earnings. After getting over the traditionally slow December period, the first three months of the year has been a boon to U.S. investment banks. This could translate into earnings power for the three firms that report fiscal results this week -- Goldman, Bear Stearns Cos., and Lehman Brothers Holdings Inc., and, later this month, Morgan Stanley.
STOCK PRICE: Goldman Sachs shares have risen about 8 percent during the fiscal first quarter. |
