Earnings Preview: Goldman Sachs

Apr.16.12 | About: Goldman Sachs (GS)

Goldman Sachs (NYSE:GS) is expected to report Q1 earnings before the market open on Tuesday, April 17, with a conference call scheduled for 9:30 am ET.

Guidance

The consensus estimate is $3.55 for EPS and $9.45B for revenue, according to First Call. Goldman Sachs' investors may have some trepidation about the firm's Q1 results, after JP Morgan (NYSE:JPM) last week reported that its investment bank's income sank 29% year-over-year. Increased worries about Europe may also worry Goldman investors, given the firm's sizable exposure to European credit default swaps. Other headwinds facing Goldman include continued regulatory risks, as regulators continue to work on writing the final version of the Volcker rule, and fears mount that the FHA may order write-downs on the principal of underwater mortgages. Goldman is launching a new fund to buy home loan bonds, Bloomberg reported on March 30. Finally, Goldman's reputation appears to have take a hit as a result of the highly critical op-ed written by Greg Smith, a former employee of the firm, last month. Investors likely want the firm to address these issues during tomorrow's conference call.

Analyst Views

On a positive note, Citigroup wrote in a March 29 note to investors that Goldman's Q1 results were tracking better than expected, due to improved fixed income trading. Citigroup raised its target on Goldman to $145 from $135 and maintained a Buy rating on the stock.