Goldman Sachs
(NYSE:GS) surprised shareholders today with a 79 percent surge in
fiscal third-quarter net income after sevearl of its segments
reported record revenue, according an
8-K filing with the SEC. The financial services firm is one of the few banks not hit hard by subprime mortgage and credit issues.
"Given
the difficult environment of the third quarter, many of our businesses
were challenged," said Lloyd C. Blankfein, Chairman and Chief Executive
Officer. "But overall, the quality of our franchise produced strong
results as clients continue to look to us for advice and execution. The
strength of our client relationships, the diversity of our businesses,
and the talent and teamwork of our people continue to drive our
performance."
Goldman Sachs now ranks first in worldwide
announced mergers and acquisitions with its financial advisory segment
reporting net revenues 64 percent higher than its previous record.
Meanwhile, its brokerage business generated record commissions along
with its fixed income, currency, and commodities trading segment.
The
good news comes after three of Goldman Sachs' investment funds were hit
last month with major trouble due to their quantitative trading system,
including its flagship Global Alpha fund. As a result, the company
announced that it would inject $3 billion into the troubled funds in
order to preserve liquidity and help them weather the storm.
Clearly,
the concerns about the credit crunch and hedge fund blow-ups were
overdone when it came to Goldman Sachs. Given the strong insider buying
across the financial sector, perhaps these problems aren't as great as
investors had been expecting. Regardless, GS and other investment banks
are definitely stocks
worth watching!
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