Goldman Reports Lower Losses than Anticipated
The world's biggest securities firm by market value, Goldman Sachs Group Inc., reported a smaller-than- estimated 53 percent drop in first-quarter profit after asset write-downs and lower fees from investment banking.
et income fell to $1.51 billion, or $3.23 a share, in the three months ended Feb. 29 from $3.2 billion, or $6.67, a year earlier, the New York-based firm said in a statement today. The average estimate of 17 analysts surveyed by Bloomberg was for $2.59 a share, with forecasts ranging from $1.95 to $3.40.
Chief Executive Officer Lloyd Blankfein is navigating a credit market crisis that led the U.S. Federal Reserve and JPMorgan Chase & Co. to organize a bailout and then takeover of Bear Stearns Cos. Goldman's profit dropped the most since 1999, reduced by $1 billion of writedowns for high-yield loans and a $135 million decline in the value of its stake in Beijing-based Industrial & Commercial Bank of China Ltd. Losses on mortgage loans and related securities were about $1 billion.
Goldman has stayed "above the fray and probably faces the least amount of risk,'' said Ralph Cole, who helps oversee $2.7 billion, including Goldman shares, at Ferguson Wellman Capital Management in Portland, Oregon, before the earnings release. ``People have a tremendous amount of confidence in them and that's what it comes down to these days.''
Published on March 18, 2008
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