Goldman Sachs revenue more than doubles on investment gains

NEW YORK, Tue Oct 16, 2012 – Goldman Sachs Group Inc. reported a third-quarter profit, reversing a year-earlier loss, as revenue more than doubled due to gains in stocks and bonds the investment bank holds as investments.

Goldman on Tuesday posted earnings applicable to common shareholders of $1.5 billion, or $2.85 per share, compared with a loss of $428 million, or 84 cents per share, a year earlier. Net revenue rose to $8.35 billion from $3.6 billion.

Analysts had expected, on average, earnings of $2.12 per share, according to Thomson Reuters I/B/E/S.

Most of Goldman’s revenue gains came from its investing and lending division, which consists of stocks and bonds it holds as investments. The value of those assets rose after the U.S. Federal Reserve unveiled a new program to boost liquidity, but trading volumes and deal activity were still muted.

The bank reported $1.8 billion in revenue from that business; a year earlier, the investing and lending division reduced overall revenue by $2.5 billion.

In a statement, Goldman Chief Executive Lloyd Blankfein described the bank’s third-quarter performance as “generally solid.”

Goldman shares were up 50 cents to $125.00 in premarket trading.

U.S. airlines had profitable third-quarter, but growth concerns loom

WASHINGTON, Fri Oct 12, 2012 – U.S. airlines are expected to report solid profits for the third quarter, thanks to steady demand and fuel prices that declined toward the end of the period, but signs of slowing growth could spell challenges for the rest of the year.

Unit revenue – a measure of how much airlines can charge for tickets and how full planes are – decreased at many carriers in September. In addition, the number of passengers boarding planes at most big U.S. airlines fell, as travel started its seasonal slowdown in the month.

“The revenue environment appears to be softening a bit,” said Ray Neidl, an aerospace analyst with Maxim Group. “People will be looking to see if these trends continue into the fourth quarter.”

The earnings reports kick off next week, with AMR Corp.’s American Airlines reporting on Wednesday, followed by Southwest Airlines Co. on Thursday.

The third quarter is traditionally strong for airlines as it includes the benefit of some summer travel. Among the five major U.S. airlines, all are expected to report profits. AMR, currently undergoing restructuring in bankruptcy, is expected post its first profit after seven quarters of losses.

WellPoint raises forecast as third quarter profit exceeds expectations

INDIANAPOLIS, Ind. ― WellPoint Inc. posted a higher-than-expected third-quarter profit on Wednesday on strong membership gains, and the health insurer raised its full-year profit forecast.

WellPoint also projected that profit would rise next year from its newly increased 2011 forecast.

Quarterly net income fell to $683.2 million from $739.1 million a year earlier. Earnings per share rose to $1.90 from $1.84 a year before, when the company had more outstanding shares.

Excluding investment gains, earnings of $1.77 per share were 9 cents ahead of analysts’ average estimate, according to Thomson Reuters I/B/E/S.

Revenue rose about 6 percent to $15.16 billion.

Medical enrollment stood at about 34.4 million, up 2.6 percent from a year earlier. The company reported gains in its plans serving large and small employers, while increases in its Medicare plans were helped by its acquisition of CareMore Health Group.

WellPoint spent 85.1 percent of its premium revenue on medical claims, more than 83.8 percent a year before. The ratio, which is closely watched as an indicator of profitability, was better than the 86 percent expected by Wells Fargo analyst Peter Costa.

Health insurers have seen their claim costs stay low during the weak economy as Americans avoid doctor visits and procedures.

WellPoint projected 2011 earnings in a range of $7.18 to $7.28 per share. Excluding net investment gains, the forecast is $6.90 to $7.00 per share, up from its prior range of $6.75 to $6.95.

Analysts have been looking for $7.07.