- Bank of America: estimates were trimmed by 2 cents for the quarter to 10 cents and by 5 cents for the year to $1 a share
- JPMorgan Chase: estimates were lowered by 4 cents for the quarter to 70 cents a share and by 5 cents for the year to $3.25 a share
- Morgan Stanley: Goldman cut estimates on Morgan the most, shaving 16 cents off quarterly earnings to 55 cents a share for the March-ending quarter and cut 5 cents off full year earnings to $2.95 a share
- Jefferies Group: estimates were trimmed 6 cents for the quarter to 32 cents a share and by 10 cents for full year earnings to $1.45 a share
- Piper Jaffray (PJC): 9 cents were shaved off quarterly earnings to 55 cents a share and 10 cents off of full year estimates to $2.70 a share
- Citigroup: quarterly and full year earnings estimates remain unchanged at 1 cent and 10 cents, respectively.
NEW YORK ( TheStreet) -- Bank of America ( BAC), JPMorgan Chase ( JPM), Morgan Stanley ( MS) and other financial stocks were sliding Friday, after Goldman Sachs lowered quarterly and full-year earnings estimates due to weak capital markets revenue during the month of February. Goldman cut first-quarter estimates on the major banks and brokerages by an average of 15%. It cut estimates on full-year earnings by an average of 3%. "In general, while we continue to have a positive view on the direction of capital markets activity, lower-than-expected February results are likely to soften what otherwise would have been solid first quarter results," Goldman analysts write in an industry research note to clients Friday. While Goldman expects fixed income, commodities and currencies, or FICC, businesses to rebound sharply from weak fourth quarter levels, it may be somewhat offset by weak February levels. Goldman also expects lower investment banking activity from the fourth quarter, even though "the lone bright spot was debt issuance." Equity trading, while up 5% quarter-over quarter in terms of U.S. volume, is "not likely to be a buffer against weak
investment banking trends." Goldman tells clients to avoid "pure play" brokerages like Jefferies ( JEF), rated sell, and is "somewhat more wary of prospects" for Morgan Stanley and Citigroup ( C), both rated neutral, as "recent results from these firms indicate they may not capitalize on current trends as much as peers," according to the note. The analysts favor more diversified companies like Bank of America and JPMorgan, both rated at buy, "where a weak February is more easily absorbed and may be offset by better than expected consumer provision leverage." Still Goldman remains "upbeat" regarding trends for the remainder of the year. "While we are reducing capital market revenue estimates for first quarter , strong M&A backlogs, improving equity capital market pipelines as well as our expectation for a steep yield curve should continue to support activity into the second quarter," the note says. A rundown of Goldman's estimate revisions are as follows:
-- Written by Laurie Kulikowski in New York.