Goldman Sachs (GS) is expected to report Q1 earnings before the market open tomorrow with a conference call scheduled for 8 am ET.
Guidance
The consensus estimate is $4.01 for EPS and $11.16B for revenue, according to First Call. The SEC on Friday charged Goldman Sachs and one of its vice presidents with defrauding investors by misstating and omitting key facts about a financial product tied to subprime mortgages. Specifically, Goldman allegedly failed to tell investors that a hedge fund, Paulson & Co., had helped to select the mortgages that made up the financial product and was shorting it. Goldman has denied any impropriety, but its stock has fallen to $158.60 from $181.85 since the charges were announced on Friday morning. Investors will try to determine during the company’s conference call the extent to which Goldman’s business could be hurt by these charges. Meanwhile, there is also some concern among investors that the charges against Goldman will facilitate the passage of a restrictive financial regulatory reform bill. The current version of the bill includes a provision increasing the transparency of derivatives trading.
On a positive note, JP Morgan reported better than expected results last week, and the bank’s CEO, Jamie Dimon, said that its investment banking pipeline looks “fine.” In addition, Citigroup (C) today reported better than expected results, and said it expects consumer credit trends to rebound.
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