With Goldman Sachs issuing a rare miss on Tuesday, investors are wonder what its profit report means for the sector as a whole.
As you likely know, Goldman stunned many of its tried and true fans when the firm said that its quarterly earnings tumbled 82 percent, steeper than forecast.
The firm blamed recent weakness on lower trading revenues and a one-off charge for its settlement of civil fraud charges with the Securities and Exchange Commission
Nonetheless, the results raised questions about whether the firm is losing its ability to outsmart the competition.
"We've grown accustomed to Goldman bucking the trends in (banking), but this quarter it seems like maybe they're more susceptible to broader industry issues," says Walter Todd, portfolio manager with Greenwood Capital Associates in a Reuters Interview. "Maybe Superman is turning into Clark Kent."
By the numbers, the financial giant said its net income was 78 cents a share in its second quarter, compared with $4.93 a share this time last year.
Excluding one-time items, Goldman earned $2.75 a share, topping analysts' estimates.
Sales for the most recent quarter reached $8.84 billion, down from $13.76 billion in the same period last year.
Analysts who follow the company projected Goldman Sachs to earn $2.08 a share on revenue of $8.94 billion, according to a consensus estimate from Thomson Reuters.
What’s the trade?
When I look at the quarter I can’t help but remind myself we had the flash crash and equity market weakness, says Doug Sipkin of Ticonderoga Securities.
We also had fears in Europe hitting the bond market. But now it’s baked in.
I think the sector is looking much better going forward. I’m a buyer of Goldman at current levels, he reveals.
And I'd rather be in Goldman than Morgan Stanley but I think both stocks work.
> Click here for additional coverage of Goldman Sachs earnings
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Trader disclosure: On July 20, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Terranova owns (EMC), (CREE), (CRCM), (LRCX), (COP), (AXP), (BMO), (CSX), (PEP), (CVS), (GS), (PCP), (C), (APA), (FCX), (JOYG), (MMM), (MOS), (GLD), (UAUA), (WYNN), (GOOG), (BBY), (SU), (KOL); Kelly owns (BP) puts; Kelly is short (GS); Cortes is short the US$; Cortes is short the S&P 500; Cortes is long Crude Oil; Cortes owns (GS); Cortes is short (BAC); Grasso owns (ASTM), (ABK), (BAC), (BA), (BGP), (C), (CSCO), (DYN), (JPM), (LPX), (MO), (NDAQ), (PFE), (PRST); Finerman owns (AAPL); Finerman’s firm owns (BAC); Finerman owns (C); Finerman owns (BAC) & (BAC) preferred; Finerman owns (JPM); Finerman’s firm owns (JPM); Finerman’s firm owns (MCD); Finerman’s firm owns (WMT); Pete Najarian owns (AAPL) call spreads; Pete Najarian owns (C) call spreads; Pete Najarian owns (GS) call spreads; Pete Najarian owns (LOW) call spreads; Pete Najarian owns (TCK) call spreads; Pete Najarian owns (PFG) call spreads; Pete Najarian owns (TEVA) call spreads; Pete Najarian owns (CNI) call spreads; Pete Najarian owns (GNW) call spreads; Pete Najarian owns (V) call spreads
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