Goldman Sachs Reaps Big Profits from Fixed Income

(Update includes new analyst comments; updates share prices throughout.)

Goldman Sachs (GS Quote) reaped huge profits from its giant, opaque fixed income, currencies and commodities division for the second straight quarter, apparently benefitting above all from reduced competition.

On a conference call discussing the earnings Tuesday morning, Goldman CFO David Viniar gave the impression that the strong revenues in that division, as well as in equities trading, came above all from acting as an agent between two parties, or providing services such as hedging, rather than by making risky investments.

Goldman's overall profit of $3.44 billion, or $4.93 per share, is more than 6% higher than the highest estimate of 16 analysts polled by Thomson Reuters. The consensus analyst estimate was a profit of $3.54 a shares, according to Thomson Reuters. ...