The Edge: Breaking Down Earnings from Goliaths Goldman Sachs, Google, and GE

The Trading Edge with Derek HoffmanEarnings season is a critical time to reflect on which tone markets will exhibit before holiday sales take center stage. This week I examine three companies which have overwhelmingly contributed to the positive zeal behind Wall Street’s rallies: Goldman Sachs, Google, and GE.

While cream-of-the-crop banking analysts Meredith Whitney and Christopher Whalen both issued downgrades on Goldman Sachs (NYSE: GS) early last week, on Thursday Goldman reported quite impressive numbers: EPS of $5.25 vs $4.24 consensus estimates on revenus of $12.37 bln vs. $11.02 consensus estimates. The so-called “bank that rules the world” managed to somehow blow away estimates while Warren Buffett continues to get paid on his investment.


Also on Thursday, Google (NASDAQ: GOOG) reported 14% growth in paid ad clicks. During the conference call, CEO Eric Schmidt was bullish on hiring more employees for his company. A very interesting sign of Google’s optimism. Further, Google is forecasting positive sentiment about 2010 ad budgets. With the decline in print readers, looks like advertisers are finally appropriating their dollars to the future of media: digital advertising. One thing is for sure, investors are digging the former Wall St. Cheat Sheet pick.

On Friday, General Electric (NYSE: GE) said its capital division was battered down by credit card and commercial real estate losses. Commercial real estate defaults are the latest domino effect of loans to begin defaulting in large sum and at rapid speed. GE raised the yellow caution flags for investors on Friday and the technicals prove a double-top halt is in play for the stock.


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