Earnings Buzz

Sorry – I got a late start this morning but some noteworthy earnings reports are crossing the tape I wanted to mention…

Goldman smashed expectations, even though profit is down from last year. Fixed income trading was terrible at the bank in Q4, as it was for just about everyone. C’est la vie. In the meantime, revenues came in precisely $1 billion over what The Street had expected.

BlackRock is the largest asset manager in the world so it should come as no surprise that the year-end explosion in the investment markets was great for business. Earnings were up 22% in the quarter, an astonishing rate of profit growth for such a large business. The stock is taking out a new record high today and assets at the company are now….wait for it….$4.3 trillion! Hopefully they don’t leverage it up and start bookmaking in risky CDS contracts for everyone. Just kidding. No I’m not.

Citigroup missed big on both earnings and revenues because, well, Citigroup. Citi had trouble with fixed income trading just like Goldman, also mortgages weren’t great and the bank’s expenses are still too high. But how about this, from the CEO Michael Corbat’s prepared statement: “We didn’t finish the year as strongly as we would have liked.” What a dry, British wit on that gentleman. Better luck next time.

And then there’s Best Buy. This has been a confounding stock for both shorts and longs. It tripled last year, murdering the shorts who had pressed their bets too far as comps got easier and the company got focused on right sizing the business. But now that’s over and the company has to actually execute. And they can’t, because people prefer Amazon and that’s not going to change. The worst part is that there’s very little that Best Buy can do about this. They can cut prices all they want but it’s not going to help the share price and probably won’t convert customers back from Amazon anyway. Tough stock. It’s down like 30% this morning.

More later…