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.
The Wall St. Cheat Sheet Premium Newsletter has delivered 15 out of 16 winning picks since inception in November 2008. Let the Hoffman Brothers give you their best investing and trading ideas: click here now for your free trial.
Disclosure: No holdings in GS.