Citigroup Inc. (NYSE: C) spurred a big run in financial stocks yesterday (Monday) after the commercial-banking giant beat Wall Street estimates by reporting a huge surge in quarterly profits.
Don't expect the same exuberant response to U.S. investment bank earnings reports.
Indeed, Wall Street analysts are expecting a very different set of results from the U.S. investment-banking sector, when giants Goldman Sachs Group Inc. (NYSE: GS) and Morgan Stanley (NYSE: MS) report their third-quarter results this week. Goldman reports today (Tuesday) and Morgan Stanley tomorrow (Wednesday).
Analysts started reducing profit forecasts on the U.S. investment-banking sector back during the summer - and with good reason: Uncertainty about the strength of the economic recovery - and worries about the Bush tax cuts and the midterm elections - have led to a major drop-off in such important businesses as fixed-income trading.
Dealmaking volume - thanks to the spike in mergers and acquisitions - enjoyed an advance in August. And fees from bond underwriting could at least partly offset drop-offs in the equity-underwriting and advisory businesses.
But it won't be enough: As a result, analysts are forecasting an overall decline in investment-banking revenue from last year's third quarter.
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Investment Bank Earnings Preview: Giants Goldman Sachs and Morgan Stanley To See Revenue Decline
Goldman's First-Quarter Profit Doubles to $3.46 Billion, Even as its Fraud Probe Takes on an International Twist
Investment-banking giant Goldman Sachs Group Inc. (NYSE: GS) - the target of a civil fraud case filed by U.S. securities regulators - yesterday reported that its first-quarter earnings nearly doubled, even as the probe against it took on an international twist.
The New York-based Goldman said it earned reported first quarter earnings of $3.46 billion today (Tuesday), or $5.59 a share, an increase of 91% from earnings of $1.66 billion, or $3.39 a share, for the same period a year ago. The earnings report came just days after the U.S. Securities and Exchange Commission filed a civil fraud case against the Wall Street financial heavyweight.
Goldman's earnings beat analysts' average estimates of $4.16 a share. Its investment bank income revenue rose to $12.78 billion, and its fixed-income, currency and commodities trading generated net revenue of $7.39 billion.
The New York-based Goldman said it earned reported first quarter earnings of $3.46 billion today (Tuesday), or $5.59 a share, an increase of 91% from earnings of $1.66 billion, or $3.39 a share, for the same period a year ago. The earnings report came just days after the U.S. Securities and Exchange Commission filed a civil fraud case against the Wall Street financial heavyweight.
Goldman's earnings beat analysts' average estimates of $4.16 a share. Its investment bank income revenue rose to $12.78 billion, and its fixed-income, currency and commodities trading generated net revenue of $7.39 billion.
Three Ways to Profit From an Insurance-Sector Rebound
Regional banks, investment bankers and insurance companies will be key winners in the next phase of an advance that will be characterized by very lukewarm participation by the average private investor.
Most investors will be surprised by this turnabout - and especially by the insurance-sector rebound.
Let me show you three ways to profit.
Most investors will be surprised by this turnabout - and especially by the insurance-sector rebound.
Let me show you three ways to profit.
To find out what companies will profit from this new trend, read on...
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