Preview: Goldman’s First Quarterly Loss


We know that Goldman Sachs (GS) is set to report its first quarterly loss as a public company when it announces earnings. Earlier this month, The Wall Street Journal reported that the firm would likely lose $2 billion — a number that probably came from the company itself in an attempt to manage expectations. The best hope is that the number was low-balled so that a smaller loss, say, $1.5 billion, looks like a beat. Or it could be worse.

CNBC has a good roundup of what to look for:

Some specific statistics to watch:

  • Total Assets (was $1.08 trillion at end of Q3)
  • Tier 1 asset ratio (was 11.6% at end of Q3)
  • Level 3 assets were $68 billion at the end of Q3 or about 6% of total assets.

And in terms of actual earnings

MANAGING EXPECTATIONS – Estimates for Goldman Sachs have plummeted to a loss of $3.50 per share from a profit of $0.54 per share just 30 days ago and well after the financial crisis was in full swing. So, it’s cold comfort to say that Goldman has beat expectations for 12 straight quarters. The rapid drop in estimates should also be kept in mind when evaluating Goldman’s results.

ESTIMATES: (Note – estimates can change daily)

  • Q4 EPS down to a loss of $3.50 from a gain of $7.01, revenues down 91% to $932 million.
  • Q1 EPS down 52% to $1.52, revenues down 9% to $7.544 billion
  • FY 08 EPS down 73% to $6.69, revenues down 46% to $24.89 billion
  • FY 09 EPS up 39% to $9.31, revenues up 26% to $31.443 billion