Money Machine:Goldman Profit Breaks Record
Wall Street's Earnings Soar,
As Firms Show Appetite for Risk;
Trading Profits, Fees Add Up
Goldman Sachs Group Inc. set the bar for the rest of Wall Street yesterday with record-breaking earnings.
The profit reflects rising fees from the recent flurry of merger and acquisitions, and a continued strong trading environment for both stocks and bonds -- a scenario that may also benefit Goldman rivals that are scheduled to report results.
The New York brokerage house said net income for the first quarter ended Feb. 24 rose 64% to a record $2.48 billion, or $5.08 a share, from $1.51 billion, or $2.94 a share, a year earlier. It earned $1.63 billion, or $3.35 a share, in the 2005 fiscal fourth quarter.
Goldman surpassed analysts' expectations by 54%, or almost $2 a share. Analysts surveyed by Thomson Financial had expected the company to earn $3.29 a share on revenue of $7.19 billion in the fiscal first quarter. Goldman's net revenue, or revenue minus interest expense, rose 61% to $10.34 billion from $6.41 billion a year earlier.
Like many Wall Street firms, Goldman is taking more risk, and reaping more profit, on its own investments and for clients.
In the first quarter, Goldman's value-at-risk number -- an average figure indicating what it could lose in a day because of bad market conditions, and a closely watched indicator of trading appetite -- rose to a record $92 million in the quarter from $80 million in the preceding quarter and $65 million a year ago.
"It is the highest VAR number we have had, but not the highest you will ever see," said Chief Financial Officer David Viniar. "The firm continues to grow, and as the business grows, we see more opportunities in more places."
Analyst Daniel Goldberg at Bear Stearns said that based on Goldman's outsize earnings, investors should expect other firms to handily surpass analyst expectations. In a research report, Credit Suisse Group brokerage analyst Susan Katzke declared Goldman's results "simply huge."
Rivals Lehman Brothers Holdings Inc. and Bear Stearns Cos. also report earnings this week.
In stock trading yesterday, Goldman's shares were up $8.70, or 6.2%, at $149.42 on the New York Stock Exchange. The impressive rally carried Goldman stock to a record and lifted the shares of many of its rivals. However, some investors are wondering how much steam these stocks have left, given their impressive run of late. In the past 52 weeks, Goldman's stock has risen 35%, while the broader Dow Jones Financial Services Index is up 22%.
Record results on Wall Street have become par for the course as securities firms profit from trading activities and a surge in fees for their advice in corporate mergers and acquisitions, an area that has been particularly hot this year. Goldman's net revenue from investment-banking activity jumped 65% from a year earlier to $1.47 billion, the segment's best quarterly performance in almost six years.
On a divisional basis, trading and principal-investment net revenue rose 57% to $6.9 billion. Within that number, stock trading set a quarterly record with net revenue of $2.45 billion, up 58%.
The company's fixed-income currency and commodity-trading unit generated $3.74 billion in net revenue, also a quarterly record.
Revenue in the company's asset-management division, which includes the money it has in alternative investments such as hedge funds, rose 99%. This rise was based largely on $739 million in incentive fees paid by investors who have money in Goldman Sachs funds. Most often, the company gets paid these fees once a year, and the revenue is recorded in the first quarter.
Goldman's Mr. Viniar told analysts that the company may begin selling more of its sizable investment in Sumitomo Mitsui Financial Group. He said Goldman's investment in the Japanese bank has been growing steadily, and it may be prudent to begin reducing it.
The securities firm said its paper gain on the convertible preferred Sumitomo stock that it holds was $405 million in the quarter.
Meanwhile, the company announced that its board increased the quarterly dividend 40% to 35 cents a share, payable on May 25 to holders of shares of record on April 25.
高盛业绩再上新台阶
高盛集团(Goldman Sachs Group Inc.)周二发布了创纪录的业绩报告，令华尔街其他券商望尘莫及。
利润激增体现了近期并购活动活跃带来的大笔费用收入，股市债市交易气氛热闹不减的状况。这个业绩也有可能使即将发布业绩的竞争对手受益。
高盛宣布，截至2月24日第一财政季度净利润激增64%，达到创纪录的24.8亿美元，合每股收益5.08美元；远远高于上年同期的15.1亿美元净利润和每股收益2.94美元的表现。上财年第四季度，高盛实现净利润16.3亿美元，每股收益3.35美元。
高盛的骄人业绩比分析师的普遍预期高出54%，每股收益高出差不多整整2美元。接受Thomson Financial调查的分析师们此前曾预计，高盛第一财季每股收益3.29美元，收入71.9亿美元。实际上，高盛的净收入（收入减去利息支出）较上年同期的64.1亿美元激增61%，达到103.4亿美元。
同许多华尔街券商一样，高盛承担的风险──自己承担的风险加上代客户承担的风险──越大，利润就越大。
高盛第一财季的风险值数据从上年同期的6,500万美元和上季度的8,000万美元升至历史新高9,200万美元。风险值是衡量一家公司由于市场恶化有可能在一天之内蒙受的损失平均值，也是衡量一家公司交易兴趣的重要指标。
“这个VAR值在公司历史上的确是空前的，但不会是绝后的，”高盛首席财务长戴维?维尼尔(David Viniar)说，“公司不断增长，随著业务的扩大，我们会在更多地方看到更多机会。”
贝尔斯登(Bear Stearns)分析师丹尼尔?戈德堡(Daniel Goldberg)说，从高盛格外出色的业绩来看，投资者应该做好心理准备，迎接来自其他券商的意外惊喜。瑞士信贷集团(Credit Suisse Group)证券业分析师苏珊?凯泽克(Susan Katzke)在研究报告中称，高盛的业绩“好得惊人”。
高盛的竞争对手──雷曼兄弟(Lehman Brothers Holdings Inc.)和贝尔斯登也将于本周发布业绩报告。
高盛股价周二飙升6.2%，收于149.42美元。在出色业绩的提振下，股价也刷新了历史纪录，还带动许多竞争对手的股价一同上扬。不过，有些分析师担心，券商类股近期表现一直不错，再这样涨下去，还有多少后劲。过去52周之内，高盛股价累计上涨35%，道琼斯金融分类指数同期上涨22%。
创纪录的业绩在华尔街已经是屡见不鲜了，随著证券交易活动的升温，证券经纪公司赚取了大把利润；今年尤其热门的并购活动也带动顾问费迅猛增长。高盛投资银行业务的净收入就较上年同期激增65%，至14.7亿美元，是近六年来该部门最出色的季度业绩。
分部门来看，交易和自营投资业务净收入增长57%至69亿美元。其中，股市交易实现了最好的季度表现，净收入增长58%至24.5亿美元。
固定收益货币和大宗商品交易部门净收入升至37.4亿美元，也是历史最佳的季度净收入。
资产管理部门收入激增99%，主要是那些将买入各类高盛基金的投资者支付的奖励费（第一财季高达7.39亿美元）。通常情况下，这类费用收入一年核算一次，往往都记入第一财季。
高盛首席财务长维尼尔对分析师们表示，公司可能会开始出售更多在三井住友金融集团(Sumitomo Mitsui Financial Group)的大量投资。他还说，高盛对这家日本银行的投资一直在稳步增加，或许到了该减持投资的时候了。
高盛宣布，第一财季对三井住友可转换优先股投资的账面收益为4.05亿美元。
此外，高盛还宣布公司董事会决定将季度派息增加40%至每股0.35美元，派息日为5月25日，股权登记日为4月25日。
