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How Goldman Sachs Beat The Estimates
Expected to do little on Wall Street for the first quarter of the financial year, mega investment firm Goldman Sachs proved the critics wrong by beating the expectations for earnings in the first part of the year with a strong performance. The criticism of the investment bankers came from a belief that there would be less debt underwriting than hoped in the continuation of the housing crisis, although Goldman Sachs earned well above the estimates.
Overall, the revenues of investment banking in the firm rose by over one third, seeing a thirty-six per cent rise to well over one and a half billion dollars worth of assets. The rise was attributed to both increased corporate debt from new projects as well as better equity offerings and a rising tide in mortgage value. The overall revenue of the investment firm rose a healthy nine percent, hitting just over ten billion dollars in assets, with net income increasing by seven percent to just over two billion. This earnings figure proved much more robust than analysts thought, projecting about a two billion dollar income along with nine billion dollars revenue.
CFO Harvey Schwartz noted that although the firm outperformed estimates, the heads of the corporation were far from rejoicing. Claiming that they were still very close to the financial crisis, he noted that the public's memory was quite fresh and that there was still plenty of uncertainty ahead, especially as global events like the EU crises and the unemployment shifts projected poor forecasts for upcoming quarters of the fiscal year. What's more, the bank may have had strong earnings but compared less favorably to other investment banks like Citigroup and JP Morgan Chase, since these banks had more robust earnings prior to this year that allowed for better developments.