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Goldman Sachs Earnings Dissapointment

Since its initial public offering in 1999, Goldman Sachs has reported a quarterly loss twice.  The first time was in 2008 in the midst of the financial crisis.  The second time was last week.

Net revenue fell 60% in the third quarter.  Revenue from fixed income, commodities and currencies fell 36% (this is typically the firm’s biggest revenue source).  The loss for the quarter amounted to $393 million.  With that loss, the company’s near-term outlook is “cautious”.  And another concern: Goldman has “gross credit exposure” to the five most troubled euro zone countries, to the tune of $4.2 billion.

Company executives blame market conditions for the loss.  “Our results were significantly impacted by the environment and we were disappointed to record a loss in the quarter”, according to CEO Lloyd Blankfein.  Market condition-driven loss or not, financials are a sell.  The sector has lagged behind others with a loss of 17.6% so far this year… and the sector has been a long-term sell since June.  Goldman Sachs is down 39% year-to-date, and the stock signaled a sell back in May.


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