What to make of Goldman's earnings?

July 14, 2009 | By Jim Kim

Goldman Sachs did not disappoint: On a diluted basis, it reported earnings of $4.93 a share vs. expectations of $3.47 and $4.58 in the year-ago quarter. This is fairly stunning. Net revenues in trading and principal investments, as expected, rose 93 percent year over year, while asset management and investment banking turned in weaker performances. Trading revenue from fixed income currencies and credit products were especially strong. Equity activity was stronger as well.

And we all knew it was coming: A return to the days when it reported at least one huge principal investment gain to really goose earnings. It recorded a $950 million gain mainly related to sale of shares of Industrial and Commerical Bank of China. Can it keep this up with principal investments? All in all, the firm is once again separating itself from its peers. Truly, the old Goldman Sachs has re-emerged. Meredith Whitney predicts the shares will rise to $186. The stock is up 80 percent this year.

For more:
- here's the release