Behind the Huge Quarter From Goldman

Goldman Sachs has pre-announced its earnings. Goldman reported net revenues of $9.43 billion and net earnings of $1.81 billion for its first quarter ended March 27, 2009. Diluted earnings per common share were $3.39 compared with $3.23 for the first quarter ended February 29, 2008 and a diluted loss per common share of $4.97 for the fourth quarter ended November 28, 2008. Annualized return on average common shareholders’ equity was 14.3% for the first quarter of 2009.

Q1 EPS at $3.39 came in way above analyst estimates of $1.59.

BUT, get this. Investment banking revenues were down, financial advisory revenues were down and net revenues in asset management were down. The only revenues that were up is where they could have been shoveled to Goldman through AIG. Net revenues in Trading and Principal Investments were $7.15 billion, compared with net revenues of $5.12 billion for the first quarter of 2008 and negative net revenues of $4.36 billion for the fourth quarter of 2008.

As I wrote this morning:

Given the government is shoveling earnings to the banks through AIG the "surprises" should be on the upside.

This is turning out not to be an overstatement.