Goldman Earnings Fall 70%, Sending Shares Lower

[chatchai]

Goldman Earnings Fall 70%, Sending Shares Lower

Goldman Sachs Group said Tuesday third-quarter earnings plunged 70 percent as one of the worst market slumps ever weighed on banking and trading results.

The largest U.S. investment bank reported net income of $845 million, or $1.81 a share, for the quarter ended Aug. 29, down from $2.85 billion, or $6.13 a share, a year earlier.

Net revenue fell by half to $6.04 billion from $12.3 billion.

http://www.cnbc.com/id/26733548

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ขอบคุณค่ะ

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ขอบคุณครับพี่ครับ  :D

[SSL]

Not Great, But Well Take It
􀂄 GS Reported EPS of $1.81 vs. Our/Street Estimates of $1.75/$1.71 Trends were tough in 3Q with weakness in trading, investment banking, &
principal investments, while securities services & asset management held up pretty well. While an 8% ROE isnt great and some may question the
earnings quality (12% tax rate added ~$0.40 in EPS), GS increased its liquidity pool, grew its equity base, reduced risk exposures, and closed the qtr
with a healthy 11.6% Tier 1 ratio.
􀂄 Independent Broker Model Not Broken Mgmt made it clear that they dont think the independent broker model is broken & that issues at peers were
related to breaches of risk mgmt/asset concentration as opposed to any inherent flaws in the business model. Specifically, they pointed out that pairing
up with a commercial bank would not necessarily be beneficial given that most capital markets businesses can not be funded through a bank.
􀂄 Risk Exposures Were Reduced in 3Q GS continued to reduce risk exposures in 3Q with residential mortgage positions declining 16% sequentially
(GS has $7.4 bn in prime, $3.6 bn in Alt-A, and $1.7 bn in subprime), commercial real estate falling 11% to $14.7 bn (with $12.4 bn in loans), and
leveraged loans declining 50% to $9.5 bn through a combination of sales and what we think are mostly tight marks.
􀂄 Valuation: Maintain Neutral Rating; Lower 12-month Price target to $145 While we believe GS is well positioned to weather the difficult times &
take advantage of some distressed opportunities, we expect macro issues & higher funding costs to continue to weigh on earnings & the valuation. Our
PT is based on 1.4x our fwd book estimate.
􀂄 Notes:
Source: The content presented above reflects a front page summary of UBS Research content, UBS estimates based on a share price of US$133.01 on 16 Sep 2008 18:57 EDT