After yesterday’s closing bell, Goldman Sachs (GS) surprised Wall Street by announcing its earnings report one day ahead of schedule–and those earnings were very good.
Goldman said it made $1.81 billion last quarter or $3.39 a share which is up from the $1.51 billion, or $3.23 a share it made in the same quarter one year ago. Wall Street was expecting earnings of just $1.59 a share.
The bank also wants to return its $10 billion in TARP money as soon as it can. When Goldman is out from under the TARP restrictions, then it can resume its tradition of massive executive bonuses.
To help them pay off their TARP money, Goldman will raise $5 billion in a stock offering. This is interesting because Goldman now believes that its stock is high enough to use a secondary stock offering.
In November, the stock was at $47 so a stock offering then would not have been a good idea. But shares of GS are up more than 170% since then, so the offering makes sense.
I rate Goldman Sachs a Buy.