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3 Earnings Reports That Caught My Attention Last Week: Goldman Sachs Group, Inc. (GS), Capital One Financial Corp. (COF), Forest Laboratories, Inc. (FRX)

Goldman Sachs (GS)As first-quarter earnings get ready to kick into high gear, I can’t help but point out that the majority of earnings reports we’ve covered over the past year have been better than expected. With so many companies reporting during the weeks that comprise earnings season, it’s easy for some earnings reports to fall through the cracks.

Each week for the past year, I’ve taken a look at three companies that could be worth further research after either beating or missing their profit expectations. Today, we’ll take a gander at three more companies that reported earnings last week. They may have slid under your radar, but they deserve a look.

Company Consensus EPS Reported EPS Surprise
Goldman Sachs Group, Inc. (NYSE:GS) $3.78 $5.60 48%
Capital One Financial Corp. (NYSE:COF) $1.58 $1.41 (11%)
Forest Laboratories, Inc. (NYSE:FRX) ($0.14) ($0.58) (314%)

Source: Yahoo! Finance.

Goldman Sachs Group, Inc. (NYSE:GS)

My Foolish colleague and banking sector analyst Matt Koppenheffer dove into Goldman Sachs’ earnings report last week for Foolish readers, but I think it’s worth rehashing because this was a considerably stronger report than Wall Street is giving the investment bank credit for.

What’s of particular interest to me is Goldman’s debt underwriting business, which produced net revenue of $1.96 billion — more than double the year-ago period. This is important because it signifies businesses’ willingness to take on more debt and refinance existing debt because of record-low lending rates. Furthermore, the Federal Reserve has made it abundantly clear that it plans to keep lending-rate targets near historic lows until sometime in mid-2015, providing ample clarity for business and allowing Goldman a free and clear path to further debt underwriting gains.

Another report highlight worth noting is the near-tripling in return on equity to 16.5% from the year-ago period. To demonstrate how ridiculously good Goldman’s ROE is relative to the competition, Morgan Stanley (NYSE:MS)‘s CEO, James Gorman, estimates his firm’s ROE could reach 10% given today’s very favorable market conditions. Morgan Stanley, arguably Goldman’s chief rival, has relied on compensation cuts and layoffs to reduce expenses and boost its bottom line. For Goldman Sachs, it’s almost entirely from top-line growth. Goldman really looks like a financial company you can buy right now!

Capital One Financial Corp. (NYSE:COF)

Whereas Goldman knocked Wall Street’s socks off, Capital One had investors bundling up after an icy fourth-quarter earnings report that saw the company miss estimates by 11%.

Capital One’s results were largely uninspiring because of a 45-basis-point drop in its net interest margin, to 6.52% from the previous quarter, and a 70-basis-point drop from the year-ago period. This drop, which can somewhat be accredited to the same historically low lending rates that helped Goldman Sachs to a great quarter, was accompanied by a $137 million sequential quarter increase in provisions for credit losses.

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