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After Exhaustive Analysis, Barclays Reckons That Some Banks May Show A Loss In Q3

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The Brits hate to be the bearers of bad news but if they have to, they have to.

Goldman Sachs will probably report a third-quarter loss as market tumult prevents the bank from generating a profit for only the second time in 12 years as a public company, Barclays Capital analysts estimated. Goldman Sachs may lose 35 cents a share in the three months ended Sept. 30, down from a prior estimate of $2.40 in earnings per share, the analysts, led by Roger Freeman, said in a note to clients today. They cut their earnings-per-share estimate for Morgan Stanley to 12 cents from 43 cents. Declines in asset prices will cause losses on some of Goldman Sachs’s principal investments, which include stakes in companies and real estate, the analysts wrote. Trading revenue and investment banking fees have also been reduced amid falling equity and credit markets and concerns that the European sovereign debt crisis is worsening.

“Nearly every line is being marked down from our prior forecasts, which were not particularly optimistic to begin with,” the analysts wrote. “Some revenue lines are being reduced by more than half and, due to the equity- and debt- market decline, we are now incorporating large principal investment losses.”



Layoffs Watch '12: Goldman Sachs, Morgan Stanley, Citigroup, Barclays?

Supposedly summer cuts are under consideration at all firms. Morgan Stanley is planning to eliminate about 100 trading jobs internationally in the next several weeks — with an unknown number of the cuts coming from New York. At Goldman, executives are likely to let the hatchet fall if the slowdown in trading doesn’t reverse itself, bank officials have said...Goldman is already cutting selectively among its middle-management ranks but could cut even deeper, sources explained. Goldman CFO David Viniar has told people that the firm may have to undergo a “right-sizing” again if the markets’ rocky road doesn’t improve, according to sources. And it’s not just Goldman and Morgan. Industry sources said that a number of other firms, including Citigroup and Barclays Capital, may also look to trim staff. [NYP]