With Goldman Sachs setting a record today for Wall Street’s most profitable quarter, the pressure’s on Lehman Brothers and Bear Sterns – who both report earnings Thursday – to keep pace. One fact that came to light during Goldman’s conference call was that mortgage products were weaker this quarter. Lehman and Bear Sterns rely more heavily on mortgages, so that could affect their earnings, says Wall Street Journal reporter Susanne Craig. She was on “Power Lunch” with Sue Herera.
In addition to the boost M&A activity gave to Goldman Sachs profits, Craig says the biggest gains came from the trading division. The risks the company took in currencies and commodities investing brought hefty returns. Investment banking, where Goldman ranks number one in the world, slipped as a percentage of revenue.
Here are the numbers: Goldman’s Q4 profit soared 93%, up to $3.15 billion, or $6.59 a share, from $1.63 billion, or $3.35 in the year-ago period. Net revenue jumped 47% to $9.41 billion. Goldman shares are up 59% this year.