Quarterly reports at banks, GS at historical profits

Seems like the industry is still shaky, besides Goldman of course.

"Now that the first major bank reported last week on its quarterly results, and the strong profits weren’t enough to convince shareholders there was a turnaround of any sort, we know the upcoming quarterly reports from Bank of America (BAC), Citigroup (C), Wells Fargo (WFC), Morgan Stanley (MS) and Goldman Sachs (GS) this week won’t due much to bring the banking sector back into favor, as it’s doubtful the remaining institutions will have much to celebrate, other than Goldman Sachs, which is set to release great numbers.

Much of the concern over the results from J.P. Morgan was the lower revenue, along with the non-event of not increasing their dividend, sending a clear signal the road remains rocky and predictability isn’t part of the economic picture at this time. That should be confirmed in this weeks’ quarterly reports as well from the other financial institutions.

The major concern for the lower revenue numbers is the profits largely came from cutting the cost of doing business rather than increasing business. That’s a concern starting off 2010 that way, as it seems to indicate things aren’t anywhere near turning around yet, no matter how the government wants to attempt to positively spin the situation.

Another negative component is the Obama administration and their catering to populist fervor, which is resulting in the stupid attempt at sucking the profits out of the banks by adding more fees to them.

It isn’t just the fees or taxes in and of themselves, but the unpredictability of Obama in what he’s going to do next as the popularity of the Democratic party crumbles around him.

As far as the quarterly expectations, both Bank of America and Citigroup should show losses for the fourth quarter, setting a somewhat bleak picture of the industry. Citigroup reports on Tuesday and Bank of America follows up on Wednesday.

Wells Fargo is also expected to show a loss, albeit it should be far less than the 79 cents a share loss they experienced last year, with estimates at about a loss of 2 cents a share this time around.

For Goldman Sachs and Morgan Stanley, the picture is different, with both being seen as enjoying profitable fourth quarters, with Morgan Stanley estimated to earn 36 cents a share and Goldman Sachs a whopping $5.19 a share. Assuming that’s the results for Goldman Sachs, it would propel them to the best annual profits in its history.

No matter what happens, the media coverage has been so negative for the industry, that the results, whether losses or gains, are already being viewed as suspect or negative, as shown by J.P. Morgan. Goldman Sachs will be vilified for being successful, while the others will remind everyone we’re a long way from turning the economic corner."

http://www.americanbankingnews.com/2010/01/18/qua…