Goldman Sachs reported profits of $3.5 billion Tuesday, delivering a much-needed shot to the firm's ailing reputation as it faces questions over its role in structuring a security tied to subprime mortgages.
Last week, the Securities and Exchange Commission charged Goldman with defrauding investors in a sale of a so-called collateralized debt obligation, or CDO. Investors in the security ultimately lost $1 billion.
"In light of recent events involving the firm, we appreciate the support of our clients and shareholders, and the dedication and commitment of our people," Goldman Sachs CEO Lloyd Blankfein said in a statement.
Strong trading and bond underwriting helped Wall Street's top investment bank record profits that were far better than investors were anticipating.
On a per share basis, Goldman earned $5.59 per share. Consensus estimates were for the company to record a profit of just $2.4 billion, or $4.01 per share, according to Thomson Reuters.
"Our performance in the first quarter reflects more signs of growth across the economy and the strength of our client franchise," Blankfein said.
Goldman Sachs shares rose 2% in pre-market trading on the news.
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how dare they make money. what gives them the right to post a profit when so many other banks and regular people are losing or have lost money. oh wait is that how capitalism works sometimes?
FDR famously (or infamously) “saved capitalism from itself”.
Obviously, finance capitalism did not allow its mind to be "focused by the prospect of hanging in the morning" back in the last Great Depression - and will hopefully get it just rewards this time.
Alan MacDonald
Sanford, Maine