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kcowan · 04-15-2009, 11:01 AM

Suspicions confirmed:

Quote Barry Ritholtz:Goldman’s 2008 fiscal year ended Nov. 30. This year the company is switching to a calendar year. The leaves December as an orphan month, one that will be largely ignored. In Goldman’s news release, and in most of the news reports, the quarter ended March 31 is compared to the quarter last year that ending in February.

The orphan month featured — surprise — lots of writeoffs. The pre-tax loss was $1.3 billion, and the after-tax loss was $780 million.

Would the firm have had a profit if it stuck to its old calendar, and had to include December and exclude March?

The Case of the Missing Month

GS Press Release wrote:Net loss for December is 1.028 billion, or -2.15 / share. Reported quarterly net earnings were 1.659 billion.

Adding the two numbers, GS really netted 631 million. So the surprise good earnings of $3.39/share (consensus $1.64) is only $1.24 for the 4 months ending March 31. To normalize to 3 months, it would be only 1.24x3/4=0.93!

Reported 3.39, good accounting representation 0.93 EPS.
Who is buying those shares being offered? Maybe their symbol should be BS?

04-15-2009, 11:01 AM	#462
kcowan Thinks s/he gets paid by the post Join Date: Jul 2006 Location: Pacific latitude 20/49 Posts: 1,637	Suspicions confirmed: Quote Barry Ritholtz:Goldman’s 2008 fiscal year ended Nov. 30. This year the company is switching to a calendar year. The leaves December as an orphan month, one that will be largely ignored. In Goldman’s news release, and in most of the news reports, the quarter ended March 31 is compared to the quarter last year that ending in February. The orphan month featured — surprise — lots of writeoffs. The pre-tax loss was $1.3 billion, and the after-tax loss was $780 million. Would the firm have had a profit if it stuck to its old calendar, and had to include December and exclude March? The Case of the Missing Month GS Press Release wrote:Net loss for December is 1.028 billion, or -2.15 / share. Reported quarterly net earnings were 1.659 billion. Adding the two numbers, GS really netted 631 million. So the surprise good earnings of $3.39/share (consensus $1.64) is only $1.24 for the 4 months ending March 31. To normalize to 3 months, it would be only 1.24x3/4=0.93! Reported 3.39, good accounting representation 0.93 EPS. Who is buying those shares being offered? Maybe their symbol should be BS? __________________ For the fun of it...Keith