"You would never have thought there was a subprime problem, not from their numbers anyway," said Rose Grant, who helps manage about $2 billion, including Goldman shares, at Boston-based Eastern Investment Advisors. "They've been completely different from any other firm. You see revenue increase even in their fixed-income division, while we've seen declines at other firms."Morgan Stanley and Bear Stearns are slated to report their earnings later this week, and analysts expect to see both post first-ever quarterly losses as their exposure to mortgage-backed securities and derivatives continue to eat away at each company's balance sheet.
No Mortgage Crunch Here: Goldman Sachs Sees Profits Rise, Beats Analyst Estimates
Goldman Sachs & Co. said it earned $3.22 billion in its fourth quarter ended Nov. 30, or $7.01 per share â€” up from $6.12 per share in the third quarter and $6.59 per share in its fourth quarter one year ago. Per Bloomberg, the result was slightly better than analyst estimates, who had been expecting earnings of $3.14 billion. Here's the full earnings release. The investment bank's fixed income business generated record net revenues of over $16 billion for the full year, Goldman said, a 13 percent increase over year-ago levels. In the three months ended November 30, fixed income revenues were $3.3 billion, an increase of 6 percent from the fourth quarter of last year. The bank said that "net revenues in mortgages were higher despite a significant deterioration in the mortgage market." Goldman was among the first investment banks to move to a short position on the U.S. mortgage market -- a move that has clearly benefited the firm relative to its peers, many of whom are expected to report mounting losses. From Bloomberg: