Jul. 31, 2015, 7:52 AM
- According to Reuters, the value of merger and acquisition deals through July 30 was $436.4B, including 14 deals worth over $5B apiece. Although down from June's torrid pace of $546.8B, it still ranks as the seventh busiest month on record. Leading the pack was Teva's $40.5B purchase of Allergan's generic drugs business.
- The top investment bank in terms of the total value of transactions was Goldman Sachs (NYSE:GS), involved in 35 deals worth $148.8B, including half of the top ten. JP Morgan (NYSE:JPM) was second with 30 deals worth $116.1B while Morgan Stanley (NYSE:MS) was third with 33 deals valued at $95.9B.
- Global M&A so far this year is $2.64T, up 41% from last year. The action in the U.S. is up 66%.
- Energy and healthcare are the leading sectors. There have been 1,557 deals in energy worth $407B. Healthcare is close behind with 1,577 deals worth $395B.
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Jul. 16, 2015, 11:08 AM
- Macro jitters may be making the headlines, but Goldman Sachs (GS -1%) M&A bankers aren't seeing any dip in confidence from their clients, says CFO Harvey Schwartz on the earnings call. "In terms of the degree of conversations we are having, any activity levels, it feels quite good."
- Talking about Goldman's decision to move into online consumer and small-business banking, Schwartz takes note of a particular advantage: No legacy costs or legacy infrastructure to overcome.
- Commenting on Goldman's earnings, Citi's Keith Horowitz calls the quarter "noisy," but - excluding FICC (revenue down 28% Y/Y) - strong, with investment banking a notable outperformer. He rates the stock a Neutral with $210 price target.
- WSJ Live Blog
- Conference call webcast
- Previously: Goldman beats after backing out legal charges (July 16)
- Previously: Goldman Sachs beats by $0.86, beats on revenue (July 16)
May 26, 2015, 8:37 PM
- With attention already starting to shift to regulatory approval, Charter Communications (CHTR +2.5%) CEO Tom Rutledge says his company's $55B acquisition of Time Warner Cable (TWC +7.3%) will do better with the FCC than Comcast's: Think small.
- "If you look at the ecosystem, who we're playing with in terms of other competitors, they're very large, and we'll still be a relatively small company compared to the large phone companies, compared to Comcast, compared to the wireless companies," he told CNBC.
- Charter's simultaneous deal for Bright House Networks may pump up its own leverage, but it was critical to the TWC bid, says analyst Craig Moffett: Virtually debt-free Bright House and its borrowing capacity likely added as much as $18/share to Charter's $195.71/share offer. Moffett says TWC's handling of Altice's (OTC:ATCEY) counter-play was masterful.
- About that debt: TWC bondholders are still nervous about the combined load (While the firm's 30-year bonds rose 11.7% today, they're still down about 16% from last month). Moody's is likely to push TWC into junk rating territory as debt-to-EBITDA rises from TWC's 2.97 to about 4.79 for the combination. But again, Bright House's addition and "conservative voice on the board" may be mitigating the effects.
- And MoneyBeat's deal tally: Aside from big winner TWC, winners include Goldman Sachs (NYSE:GS), (eventually) rewarded for backing Charter, and UBS, working as sole adviser to Bright House; Losers include Comcast backer JPMorgan Chase (NYSE:JPM), and Deutsche Bank (DB -3.4%) -- a Charter backer back when, but unseen in the new deal.
- Previously: Charter to merge with Time Warner Cable, buy Bright House (May. 26 2015)
Apr. 16, 2015, 10:13 AM
- Is this just another Q1 bump and then things return to lower levels, asks Mike Mayo on the Goldman Sachs (NYSE:GS) earnings call, wanting to know how sustainable the strong trends seen last quarter are. Mayo notes the investment banking backlog is already lower than it was three months ag.
- We talk to CEOs every day, says Goldman CFO Harvey Schwartz, and - at least in investment banking - the positive trend looks to remain in place. As for trading, he says, it's still too early in the quarter to know for sure.
- Having bid up the shares strongly in advance of earnings, investors today are selling the news. The stock is lower by 1% in morning action.
- Previously: Goldman up 1% early after earnings beat (April 16)
Apr. 16, 2015, 7:49 AM
- Q1 net earnings of $2.748B or $5.94 per share vs. $1.949B and $4.02 one year ago.
- Investment Banking revenues of $1.91B up 7% from a year ago. FInancial advisory revenue of $961M up 41%. Underwriting revenue of $944M down 14%, reflecting significant slowing in debt underwriting from a year ago.
- Institutional Client Services revenue of $5.46B up 23% Y/Y. FICC revenue of $3.13B up 10%, thanks to big gains in currencies and interest rate products, offset by lower action in credit, commodities, and mortgages.
- Investing & Lending revenue of $1.67B up 9% Y/Y.
- Investment Management revenue of $1.58B roughly unchanged from a year ago.
- Expenses of $6.68B up 6% Y/Y. Compensation and benefits expense of $4.46B up 11%. Ratio of comp and benefits to revenue of 42% down 100 bps Y/Y. Total staff up 1% during Q1.
- Quarterly dividend is lifted to $0.65 per share from $0.60. 6.8M shares repurchased during quarter. Another 18.6M shares remain under existing buyback program. Tangible book value per share of $159.11 up 3% for quarter.
- Conference call at 9:30 ET
- Previously: Goldman Sachs beats by $1.68, beats on revenue (April 16)
- GS +1% premarket
Apr. 16, 2015, 7:36 AM
- Goldman Sachs (NYSE:GS): Q1 EPS of $5.94 beats by $1.68.
- Revenue of $10.62B (+13.8% Y/Y) beats by $1.27B.
- Shares +1.7% PM.
Apr. 14, 2015, 3:40 PM
- Fast action at JPMorgan's trading and investment banking businesses helped the bank to consensus-beating Q1 results.
- The Corporate & Investment bank posted revenue of $9.58B in Q1, up 8% from a year ago and up 30% from Q4. Trading revenue of $5.67B gained 9% Y/Y, with a 4.5% rise in bond-trading revenue and a 22% increase in equity-trading revenue. M&A advisory revenue got off to its best start ever, up 42% from a year ago and 25% from Q4.
- Goldman Sachs (GS +1.1%) reports on Thursday and Morgan Stanley (MS +1.4%) on Monday.
- Previously: JPMorgan earnings call: Optimism on FICC (April 14)
- Previously: "Robust" activity in FICC leads strong quarter at JPMorgan (April 14)
Apr. 6, 2015, 6:11 PM
- General Motors (NYSE:GM) is down 1.5% after hours as Canada's government says it will exit its position in the U.S. automaker by selling more than 73M shares to Goldman Sachs (NYSE:GS).
- Investment arm Canada GEN will provide further details once the trade is reported with regulators in both countries.
- The sale is an unregistered block trade that wraps on Friday, April 10.
- GM common stock closed today at $36.66, making the transaction amount to some $2.7B.
Mar. 17, 2015, 11:10 AM
- A possible harbinger of things to come next month when the big banks report Q1 earnings, profits at Jefferies plunged in FQ1 (ended Feb. 28), with FICC, capital markets, and investment banking particularly weak.
- Previously: Poor results at Jefferies sinks Leucadia (March 17)
- Jefferies parent Leucadia is lower by 3.7%. Goldman Sachs (GS -1.1%), Morgan Stanley (MS -0.9%), JPMorgan (JPM -1.2%), Citigroup (C -0.1%), Bank of America (BAC -0.8%).
- ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, IAI, SEF, IYG, FXO, FNCL, FINU, KCE, RWW, RYF, KBWC, FINZ
Mar. 12, 2015, 12:47 PM
- Citigroup's (C +2.7%) $7.8B in buybacks was 10% higher than estimated by MKM analyst David Trone. Combined with the nickel dividend, that's total shareholder returns of $8.4B vs. his $7B expectation.
- Bank of America (BAC -1%) - though given just conditional approval - is set for $4B in buybacks and a nickel dividend. That's a total return of $6.1B vs. Trone's $3.1B estimate. Trone notes the bank can proceed with its buyback prior to resubmitting plans.
- JPMorgan's (JPM +1%) $6.4B buyback was shy of Trone's $7B estimate, but the 10% dividend increase was better than forecast. The total capital return of $12.9B vs. his $13.2B forecast is a "marginal negative."
- The dividend hike to $0.65 at Goldman (GS +2.1%) beat Trone's expectation of $0.62. As for the buyback, Goldman's policy of not disclosing the amount remains in place.
- Morgan Stanley's (MS +4.5%) capital return of $4.3B is more than double Trone's $1.9B estimate.
- Source: Benzinga
Mar. 11, 2015, 4:44 PM
- Goldman's Sachs' (NYSE:GS) first score of 5.8% was only marginally ahead of the 5% threshold, but the resubmitted capital plan came in at 6.4%
- Morgan Stanley (NYSE:MS) was 5.9% on both tests, so one wonders what changed. The company has announced a $3.1B buyback through the end of 2016 Q2 as well as a boost in the quarterly dividend to $0.15 per share from $0.10.
- JPMorgan (NYSE:JPM) lifted its score from a barely scraping by 5% to 5.5%.
- There's no word yet on the details of Goldman's or JPMorgan's plans.
- GS +0.9%, MS +1.8%, JPM +0.1% after hours.
- Previously: BofA must resubmit capital plan; Deutsche and Santander rejected (March 11)
- CCAR results
Jan. 16, 2015, 10:38 AM
- "Volatility in the absence of liquidity" creates an "unfriendly" dynamic, says Goldman (GS -1.8%) CFO Harvey Schwartz, on the Q4 trading environment. His comments echo those coming from Bank of America and Citigroup following weak FICC action at those banks.
- Goldman's FICC revenue in Q4 of $1.218B fell 29% from a year earlier.
- The bank, says Schwartz, didn't suffer from the Swiss franc's move yesterday, but it was "pretty extraordinary," he allows.
- Meanwhile, the WSJ's Michael Moore looks at compensation costs at the bank. As a percentage of revenue, they fell again in 2014 to just over 35%, about 1000 basis points lower than the pre-crisis average. "Is this the new normal?"
- Previously: Weak underwriting, trading slow Goldman results (Jan. 16)
- Previously: Goldman Sachs beats by $0.06, beats on revenue (Jan. 16)
Dec. 9, 2014, 8:52 AM
- A check of the other major banks premarket amid a global selloff of some note and BofA's Brian Moynihan's warning about sluggish Q4 trading revenue finds JPMorgan (NYSE:JPM) -1.5%, Citigroup (NYSE:C) -1.5%, Wells Fargo (NYSE:WFC) -1.2%, Goldman Sachs (NYSE:GS) -1.7%, and Morgan Stanley (NYSE:MS) -1.5%.
- XLF -1.1%
- ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, IAI, SEF, IYG, FXO, FNCL, FINU, KCE, RWW, RYF, KBWC, FINZ
Oct. 16, 2014, 1:03 PM
- Goldman Sachs (GS -0.8%) looks a lot different today than it did five years ago, writes Michael Moore, presenting a chart showing FICC revenue making up just 27% of the firm total vs. 53% in 2009. Also lower as a percent of firm-wide revenue is equities trading at 18% vs. 25%.
- Investment banking has a larger role at 19% vs. 9%; Investment & Lending 20% vs. 4%; Asset Management & Private Lending 17% vs. 9%. Should the volatility of the last few weeks continue, one suspects FICC revenue will again rise in importance.
- The sizable earnings beat is less impressive than the headline would suggest, says Moore, noting trading revenue - after excluding accounting gains and a benefit tied to a debt payoff - fell 11% from Q2, a worse result than that of competitors like JPMorgan, Citi, and BofA. Also helping was a cut in compensation cost to just 33% of revenue compared with 35% a year earlier - some analysts had expected the ratio to stay at the 43% level it had been at during Q1 and Q2.
- Previously: M&A and IPO action combine with Sept. volatility to boost Goldman results
Oct. 16, 2014, 7:56 AM
- Q3 EPS of $4.57 compares with $4.10 in Q2 and $2.88 one year ago.
- Investment banking net revenue of $1.46B up 26% Y/Y, with Financial Advisory revenue of $594M up 40% thanks to busy M&A activity. Underwriting revenue of $870M up 17% thanks to fast IPO action, though debt underwriting revenue fell somewhat.
- Institutional Client Services revenue of $3.77B up 32% Y/Y, with FICC revenue of $2.17B up 74% (though a nonrecurring gain helped out a bit). The FICC boon came from significantly higher revenue in currencies, along with interest rates, commodities, and mortgages, offset by significantly lower revenue in credit products. Conditions in the latter part of the quarter were notably better (and no doubt have continued into Q4).
- Investing and Lending revenue of $1.69B up 15% Y/Y thanks to strong markets.
- Investment Management revenue of $1.46B up 20% Y/Y primarily due to higher assets under supervision.
- Expenses of $5.08B up 12% Y/Y, with compensation of $2.8B up 18%. The ratio of compensation and benefits to net revenue through the year's first nine months of 40% compares with 41% from the same period one year ago. Staff increased by 3% in Q3.
- 7.1M shares repurchased during Q at an average cost of $176 each. 32M shares remain in buyback program.
- Conference call at 9:30 ET
- Previously: Goldman Sachs boosts dividend
- Previously: Goldman Sachs beats by $1.36, beats on revenue
- GS -2.3% premarket as broader markets tank again
Sep. 25, 2014, 3:09 PM
- Today's resignation of Attorney General Eric Holder could mark the beginning of the end of the Justice Department’s push to hold big banks accountable for their conduct leading up to the financial crisis.
- Several big banks, including Goldman Sachs (GS -2.1%) and Wells Fargo (WFC -1.1%), are still under investigations by the Justice Department for their sale of flawed mortgage securities before 2008, but settlements in those cases are expected to be much smaller than the big sums extracted from Bank of America (BAC -1.8%), JPMorgan Chase (JPM -2%) and Citigroup (C -2.2%).
- Another sign that the big bank cases may be winding down: Tony West, who was Holder’s point man in the bank settlement talks, recently left the Justice Department to join PepsiCo as its general counsel.
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