Goldman Sachs & Co. said it earned $3.22 billion in its fourth quarter ended Nov. 30, or $7.01 per share — 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:
"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.