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"The firm’s $1.81bn of net profits marked a 20 per cent increase from a year ago, and a sharp reversal from the $2.1bn loss in the fourth quarter of 2008. Assets under management were fairly constant at $771bn at the end of March. The performance was driven by a record showing in fixed income, commodities and currencies activities, which generated $6.56bn in revenues, more than double the total from a year ago.
"Revenues in Goldman’s equities business were $2bn, a 20 per cent decline from a year ago. Investment banking revenues, at $823m, were also off from levels of a year ago and late 2008."
The market certainly liked the report and the stock has sustained most of its recent gains, despite the dilutive $5 billion equity issuance announced in tandem with the earnings report. Desperate to escape the clutches of the government, Goldman plans to use the proceeds from the issuance to pay back the TARP, if allowed once the government-mandated stress tests are complete.
As I have noted before, in an economic environment where assets are deteriorating in value on a daily basis, I am far less interested in a financial firm's earnings report than I am in its balance sheet.
Therefore, somebody wake me up when our banks start releasing their 10-Q's.
By Mock The Market http://mockthemarket.blogspot.com/
Posted April 14th, 2009 by Armen Hareyan
