Goldman (GS) lived up to the hype this morning and reported a great quarter. Net income was $2.7 billion ($4.93 a share) including a one time $426 million dividend on TARP Preferred shares owned by the US Treasury which Goldman bought back on June 17.
Investment banking – money they receive for advice on M&A and underwriting equity and debt offerings – had its best quarter since last year’s second quarter, which was before the Lehman bankruptcy and market implosion.
But the story with Goldman these days is always their proprietary trading and black box operations that are reported under the headings “Fixed Income, Commodities and Currencies” and “Equities Trading”. These two segments accounted for 65% of their revenues in the just completed quarter. Apparently, Goldman did well trading their own capital in the market in the April-June period.
The stock, however, isn’t getting much of a pop from the blowout numbers. I guess most of the action was front run yesterday.
Disclosure: Top Gun is short shares of Goldman Sachs (GS).