Earnings Recap Cheat Sheet: Goldman Sachs (GS) Misses on Revenues, Stock Slides
Earnings: Q2 profits of $.78 vs. $2.08 consensus and $4.93 in Q2 last year. You must note, excluding the impact of the $600 million related to the U.K. bank payroll tax and the $550 million related to the SEC settlement, GS earnings per share were $2.75 vs. the $2.08 consensus.
Revenue: Decreased 35% Year-over-Year at $8.84 Billion vs. $8.94 Billion consensus.
Lloyd C. Blankfein, Goldman Sachs Chairman and CEO stated, “The market environment became more difficult during the second quarter and, as a result, client activity across our businesses declined.”
Comment: Shares of GS (NYSE: GS) sold off 3% this morning following the company’s earnings release, trading at $141.15, compared to yesterday’s closing price of $145.68 per share.
Before the SEC allegations and charges, Goldman Sachs was trading above $180 per share, as you can see in April on the chart above. After today’s earnings report, GS is now trading just a little bit above the 50-day moving average price. If the 50-day moving average can hold as support in the near-term, GS shares could possibly hold firm in the current price zone. Keep in mind, the SEC charge is now behind GS and after a huge decline in year-over-year revenue, the banking powerhouse will be motivated more than ever to execute and achieve a solid 2nd half of 2010.
Can Goldman Sachs recover quickly? Remember, Goldman Sachs employees are working around the clock, like one of our top 3 traders under 30, and they will not take declines or failure easy. When you see price support developing for Goldman Sachs shares, consider it a small window of buying opportunity for the profiteering powerhouse.
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Disclosure: No holdings in GS.