Goldman Earnings Sink After Buffett Dividend

goldman sachsGoldman Sachs' first-quarter income fell 72 percent after the bank paid $1.64 billion in dividends to redeem preferred shares it issued to billionaire investor Warren Buffett during the financial crisis.

The New York investment bank said Tuesday that it earned $908 million, or $1.56 per share, compared with $3.3 billion, or $5.59 a share in the first quarter of last year.

Excluding the dividend payment, earnings per common share were $4.38, beating the $3.95 per share forecast of analysts surveyed by FactSet.

Revenue fell 7 percent to $11.9 billion on weakness in the bank's core businesses of trading stocks and bonds and advising clients. Goldman's stock fell 0.9 percent to $152.38 in late morning trading.

The Federal Reserve gave Goldman Sachs Group Inc. permission to repay Berkshire Hathaway last month. While the Fed's decision wasn't a surprise given Goldman's ever-widening profits since the financial crisis, it reflected how far Goldman and other major banks have progressed from the darkest days of September 2008.

At that time, Buffett, who is CEO of Berkshire, helped shore up confidence in Goldman Sachs by making a $5 billion investment in the company. Berkshire received preferred shares that paid a 10 percent annual dividend. Goldman's second-quarter earnings will likely be affected by the redemption, which occurred on April 18.

In its first quarter, revenues from investment banking grew 5 percent to $1.27 billion. However, the bank's performance was mixed.

"In 2010, many of our clients' strategic and investment decisions were burdened by fears about the global economic outlook," Goldman Sachs' chief financial officer David Viniar told analysts in a conference call to discuss earnings.

Revenue from underwriting debt and stock grew 23 percent, but revenue from advising on financial transactions fell 23 percent. Revenues from trading fixed income, currency and commodities for clients also fell 28 percent.

The numbers were in line with first-quarter results reported last week by the investment banking divisions of JPMorgan Chase & Co. and Bank of America Corp. Both reported higher underwriting fees and lower trading. So far, only Citigroup has had a weaker performance compared with its peers. The bank had a 25 percent drop in investment banking, including lower underwriting

With its reputation for being the highest-paying institution on Wall Street, Goldman's compensation usually draws attention. In the first quarter, Goldman set aside $5.23 billion for compensation, down 5 percent from the same period last year. With a total employee count of 35,400, that works out to about $148,000 per employee in the first quarter.

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Major Fraud Alert

The entire Federal Banking System under FirstGov has been "Consumed" and "Levied" by way of a Maryland State Circuit/District Court Ruled “Appropriation and Garnishment” of all Future Earnings prior to and after 2004 against Bank Of America by way of the F.D.I.C. Regulations Prohibiting failing Banks from Merging with other failing Banks between the Dates of 08/04/08 and 10/09/09.

Bank of America violated the 21st Century Act: Final Amendments to Regulation CC Section:

seeking reimbursement of Credit, Loan, and Finance Balances as a "Bank Entity" and not a "Nonbank Consumer" as specified on Pages 85 and 86.

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Now all Contracts of any Corporations (Including Employment) under the "Controlling Interest" of any Investment Bank Worldwide are "Null and Void", and are also under the stipulated Rules and Regulations of an "Closely-held S Corporation rendering all Employed under Legal Actions against “Domination”, and also means that "No Corporation can hold Shares" (Proving Warren Buffetts claims of Corporate Stocks purchases Fraud) officially making every Stock Exchange on the Planet a "Ponzi Scheme" by default.

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May 29 2011 at 12:12 AM Report abuse rate up rate down Reply

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Portfolios Include in Totals Value Gain/Loss Gain/Loss% Gain/Loss Gain/Loss% Email me
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"SOTELO-E-MONEY" 321.34 B +262.21 B +339.17% +3.76 B +1.18% (settings)
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A-MYTH-E-WORLD Totals are unavailable due to mixed currencies (settings)
CENTRALKUSTOM 1.27 B +1.23 B +2,914.83% +1,317,750.00 +0.10% (settings)
CENTRALKUSTOM FUNDS 384.62 M +68,338,500.00 +5.19% +3,689,900.00 +0.97% (settings)
CENTRALKUSTOM-DENNIS* 65.94 B +65.28 B +9,780.00% +787.67 M +1.21% (settings)
CENTRALKUSTOM-INDEPENDENC 432.23 M +272.32 M +131.00% +3,209,900.00 +0.75% (settings)
CENTRALKUSTOM-LINCOLN 2.49 B +2.41 B +2,597.27% +51,269,300.00 +2.10% (settings)
CENTRALKUSTOM-SOTELO 7.11 B +7.02 B +6,676.72% +49,907,666.41 +0.71% (settings)
JR'S-E-WOELD 7 B +6.99 B +123,617.52% +28,235,242.30 +0.41% (settings)
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MTH MERITAGE HOMES CORP 25.69 +0.95 +3.84% 347,304
WX WUXI PHARMATECH CAYMAN INC 17.04 +0.59 +3.59% 399,926
RF REGIONS FINANCIAL CORP NEW 7.17 +0.19 +2.72% 38.00 M
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TI TELECOM ITALIA S P A NEW 13.96 -0.24 -1.69% 1.29 M
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FRO FRONTLINE LTD 21.72 -0.27 -1.23% 831,099
CSE CAPITALSOURCE INC 6.77 -0.06 -0.88% 1.53 M
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CSCO CISCO SYS INC 16.61 -0.12 -0.72% 76.49 M
RF REGIONS FINANCIAL CORP NEW 7.17 +0.19 +2.72% 38.00 M
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April 20 2011 at 1:12 AM Report abuse rate up rate down Reply

warren b is one smart cookie. it seemed a bold move at the time, but buffet knew goldman would not go down.

April 19 2011 at 2:48 PM Report abuse rate up rate down Reply

China urges US to protect creditors -- hey ever here of risk in the market??? Dum dum

April 19 2011 at 1:40 PM Report abuse +1 rate up rate down Reply

Goldmans Sachs executives should be prosecuted by the FTC for market manipulation, insider trading and misleading clients. They're too big and too powerful on Wall Street. Goldman consistantly makes public statements
causing market reations only to enhance their postions. All they need to do is make a statement such as "Oil will be $200.00 a barrel by mid summer" to ignite the oil markets based purely to enhance Goldman's postions in oil futures.
It's time for the Feds to investegiate and begin public hearings. Should we feel sorry for Goldman Sachs because they only made $2.23 billion dollars this quarter? We should feel bad for regular hard working American's who are
paying the price for Goldman's crimes.

April 19 2011 at 11:12 AM Report abuse +1 rate up rate down Reply