Orphaned
If you use the right methods, you can always make your earnings look better. Like change your fiscal calendar by a month, and stuff that extra month with losses:
Where’s December?: Goldman Sachs reported a profit of $1.8 billion in the first quarter, and plans to sell $5 billion in stock and get out of the government’s clutches, if it can.
How did it do that? One way was to hide a lot of losses in not-so-plain sight.
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 earnings statement, and in most of the news reports, the quarter ended March 31 is compared to the quarter last year that ended in February.
The orphan month featured — surprise — lots of write-offs. The pretax loss was $1.3 billion, and the after-tax loss was $780 million.
Link via The Big Picture.
And why did GS suddenly decide to report early? Hardly any companies do that — generally, when they say they’re going to announce earnings on a specific date, that’s when they come out. But the financial companies seem to pull these ’surprise’ announcements quite often.
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