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.

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Goldman Earnings Sink After Buffett Dividend originally appeared on BloggingStocks on Tue, 19 Apr 2011 09:03:00 EST. Please see our terms for use of feeds.

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Johnson & Johnson’s Income Falls 23%

Health care giant Johnson & Johnson says sales rebounded but its profit dropped 23 percent in the first quarter, due to higher expenses, costs of recalls and litigation and a tax gain that boosted results a year ago.

Adjusted earnings topped expectations. J&J also raised its full-year earnings outlook.

The maker of Band-Aids, baby shampoo and birth control pills posted net income of $3.48 billion, or $1.25 per share, down from $4.53 billion, or $1.62 per share, in 2010's first quarter.

But after two years of declines, revenue rose by 3.5 percent to $16.17 billion.

Adjusted income was $4.86 billion, or $1.35 per share. Analysts expected earnings of $1.03 per share and revenue of $15.6 billion.

Johnson & Johnson's Income Falls 23% originally appeared on BloggingStocks on Tue, 19 Apr 2011 08:22:00 EST. Please see our terms for use of feeds.

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Burberry Shares Leap on Sales Update

BurberryShares in British luxury goods company Burberry Group PLC jumped Tuesday after the company reported strong second-half sales and predicted a full-year profit at the top end of market forecasts.

Burberry's popularity in the Asia Pacific region, particularly Hong Kong and Taiwan, led sales 33 percent higher in the six months to March 31, compared to a year earlier.

Chief Executive Angela Ahrendts said the company expects full-year pretax profit to be at the top end of market forecasts, or around 347 million pounds ($564 million).

"While the luxury industry faces global challenges in the year ahead, we remain confident in our team's ability to outperform, underpinned by the consistent execution of our key strategies," said Ahrendts in a trading update.

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Burberry Shares Leap on Sales Update originally appeared on BloggingStocks on Tue, 19 Apr 2011 08:04:00 EST. Please see our terms for use of feeds.

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Stocks Retreat on U.S. Debt Concerns

tradersA warning from Standard & Poor's that the agency might lower its rating on U.S. government debt sent stocks on their steepest slide in a month Monday.

S&P said there is a 33 percent chance it would lower the country's credit rating from AAA in the next two years if Washington fails to pare the country's debts.

The Dow Jones industrial average, the S&P 500 index and the Nasdaq composite all had their sharpest falls since March 16.

The Dow fell 140.24 points, or 1.1 percent, to close at 12,201.59. The Standard & Poor's 500 fell 14.54, or 1.1 percent, to 1,305.14. The Nasdaq composite fell 29.27, also 1.1 percent, to 2,735.38.

S&P reaffirmed the U.S. government's top credit rating of AAA but expressed doubts that Washington would move quickly to curb the country's mounting budget deficits.

U.S. government bonds are widely seen as the benchmark for the safest kind of debt. The highly unusual move by the ratings agency to lower its outlook for U.S. debt to "negative" from "stable" caught investors off guard.

"This is a wake-up call," said Peter Cardillo, chief market economist at New York-based brokerage house Avalon Partners Inc. "The government is now going to have to do something to cut the budget. That is a long-term positive for the stock market, though it might not be in the near term."

The change means that S&P could lower its rating on U.S. government debt in the future. If that were to happen, the U.S. government would have to pay more to borrow money when it issues bonds.

Since the government's borrowing rates are used as a benchmark for nearly all kinds of debt, many borrowers would also pay higher rates, including companies, homeowners and credit card users. That would have a negative impact on spending in general and the overall economy.

"The credit worthiness of the country is the underpinning on which all other asset classes are valued," said Jack Ablin, chief investment officer at Harris Private Bank. "If all of a sudden the credit quality of U.S. Treasurys isn't as high as people perceive, we could see (an) erosion of confidence and values decline."

U.S. government debt prices fell after the S&P warning came out but soon recovered. The yield on the 10-year Treasury note, which rises when the note's price falls, jumped as high 3.47 percent after the S&P's warning, from 3.38 percent just before. By late afternoon the yield was back at 3.38 percent.

The euro fell against the dollar as Europe's debt problems spread. Spain had to pay a much higher interest rate on new debt. There was speculation of a possible default by Greece, and a nationalist party in Finland made big gains in an election Sunday.

The euro was worth $1.4235 in late trading, down from $1.4436 Friday.

Citigroup Inc. closed flat at $4.42 after reporting earnings that came in just above analysts' expectations. The bank's net income fell 32 percent but it was able to set aside less money to cover losses from loan defaults as more customers made payments on time.

Several other big banks are due to report earnings this week. Traders are keen to find out if banks are lending more. Upcoming reports from Goldman Sachs Group Inc. and Wells Fargo & Co. this week are "crucial for the markets," says Quincy Krosby, a market strategist for Prudential Financial.

Industrial supply company W.W. Grainger rose 1.7 percent. The company's first-quarter net income soared after it began offering new products and pushed into Mexico, Colombia and Japan.

Four stocks fell for every one that rose on the New York Stock Exchange. Trading volume was 4.6 billion shares.

Stocks Retreat on U.S. Debt Concerns originally appeared on BloggingStocks on Mon, 18 Apr 2011 16:00:00 EST. Please see our terms for use of feeds.

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Citi’s Income Falls 32% as Underwriting Slips

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CitigroupCitigroup's first-quarter income fell 32 percent on lower revenue from its investment banking business and a decline in consumer loans. The bank was able to set aside fewer reserves for losses as more borrowers were able to keep up with their debt payments.

The New York bank on Monday said it earned $3 billion, or 10 cents per share, compared with $4.4 billion, or 15 cents a share in the first quarter of last year. The earnings were slightly higher than the 9 cents a share estimated by analysts surveyed by FactSet.

First quarter revenue fell 22 percent to $19.7 billion from the same period last year.

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Citi's Income Falls 32% as Underwriting Slips originally appeared on BloggingStocks on Mon, 18 Apr 2011 10:00:00 EST. Please see our terms for use of feeds.

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U.S. Debt Concerns Weigh on Global Stocks

tradersGlobal stocks sank Monday after a leading credit ratings agency warned of a deteriorating U.S. financial position and investors fretted over a debt default by bailed-out Greece.

Though Standard & Poor's reaffirmed its triple A rating on the U.S., it downgraded its credit outlook to negative from stable, citing a "material risk" that policymakers won't be able to agree on a plan to deal with the "very large" budget deficit.

"While it has been widely recognized that the U.S. credit rating may have been at some risk of a downgrade for years, S&P's action still comes as a major wake-up call for policymakers, and investors," said Douglas Porter, deputy chief economist at BMO Capital Markets. "This may well prompt more forceful action on the deficit in the next two years, which in turn will act as a more forceful drag on the economic recovery."

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U.S. Debt Concerns Weigh on Global Stocks originally appeared on BloggingStocks on Mon, 18 Apr 2011 09:33:00 EST. Please see our terms for use of feeds.

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