Goldman Sachs: Financial Winners & Losers

BOSTON ( TheStreet) -- Goldman Sachs ( GS) was among the losers of the financial sector Tuesday after the investment bank reported second-quarter results, which exceeded estimates on the bottom line but fell short of revenue expectations.

Goldman Sachs posted a second-quarter adjusted profit of $2.75 a share, which excludes charges related to the U.K. bank tax and the settlement with the Securities and Exchange Commission. Including those charges, earnings were 78 cents a share, Goldman said. Net revenue fell to $8.84 billion from $13.7 billion a year earlier, below the $8.94 billion consensus target.

Goldman said that net revenue from investment banking fell 23% from the first quarter, while net revenue from trading and principal investments dropped 36% from the first quarter of 2010.
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Rochdale Securities analyst Dick Bove acknowledged that Goldman's second-quarter results were "very poor" but said they were unlikely to persist going forward. "Goldman has just led managed the biggest underwriting in history and its backlogs are solid. The third quarter is starting off with good results," Bove wrote in a research note Tuesday.

After dropping at the start of trading as low as $141.55, Goldman shares retraced most of those losses and were down 0.2% to $145.41.

Among other major U.S. bank stocks, Bank of America ( BAC) shares slid 1.1% to $13.45 after Keefe, Bruyette & Woods analysts cut their stock price target to $18 from $22, calling the bank's revenue outlook "a little depressing." The firm added that valuation still warrants an outperform rating on the stock.

KBW analysts also cut the stock price target on Zions Bancorp ( ZION) to $25 from $27, citing the bank's second-quarter earnings miss. Zions shares were dropping by 9.2% to $19.45.

Elsewhere, Wells Fargo ( WFC) slumped 1.9% to $25.53, Morgan Stanley ( MS) was down 0.7% to $24.62, and JPMorgan Chase ( JPM) slipped 0.4% to $38.90. On the upside, Citigroup ( C) tacked on 0.5% to $4.

In other earnings news, Bank of New York Mellon ( BK) matched the Thomson Reuters average estimate with a second-quarter profit of 54 cents a share. Assets under custody and administration totaled $21.8 trillion, a 6% increase from a year ago. Shares of New York Mellon fell 1.4% to $25.27.

On the other hand, State Street ( STT) shares rose 3.5% to $38.64 after the company said it had second-quarter earnings of 93 cents a share, as the company preannounced. Revenue of $2.3 billion was in line with consensus estimates. State Street said it expects full-year earnings to be "slightly higher than" $3.32 a share, compared to the Thomson Reuters average estimate of $3.34 a share.

Also on the positive side, MGIC Investment ( MTG) climbed 5.8% to $8.27 after the mortgage insurer posted second-quarter earnings of 13 cents a share, surprising analysts who had expected a loss of 64 cents a share in the quarter.

Other financial names were trading lower on quarterly results. Marshall & Ilsley ( MI) shares fell by 8.6% to $7.05 after the bank reported a second-quarter loss of 33 cents a share, wider than the loss of 26 cents a share analysts predicted.

LaBranche ( LAB) plunged by 9.8% to $3.70 after the company reported a second-quarter loss of 33 cents a share, swinging from a year-ago adjusted profit of 13 cents a share.

Also, TD Ameritrade ( AMTD) slipped 3.6% to $15.25 even after the online brokerage services provider reported a fiscal third-quarter profit of 30 cents a share, which was ahead of the Thomson Reuters average estimate for a profit of 28 cents a share.

-- Written by Robert Holmes in Boston.

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