Goldman Sachs, J&J earnings top expectations

NEW YORK -- Goldman SachsGS said Tuesday that its second-quarter profit easily surpassed expectations as profit was buoyed by strength in its trading and underwriting businesses.

The New York-based banking giant, long considered one of the strongest in its sector, said it earned $2.72 billion, or $4.93 a share, after preferred stock dividends, up from $1.66 billion, or $3.39 a share, a year earlier.

Analysts forecast earnings of $3.54 a share for the quarter.

Amid the mushrooming credit crisis and after the collapse of Goldman's competitor Lehman Brothers, the government provided hundreds of financial firms with cash to bolster their balance sheets.

Goldman recorded a charge of 78 cents per share as it repaid the government's $10 billion investment in the bank as part of the Troubled Asset Relief Program.

Analysts predict other banks may not be as strong as Goldman Sachs as they were hit with greater loan losses because of their focus in retail banking and their more conservative approach to business after the credit crisis.

Bank of AmericaBAC and CitigroupC have been among the hardest hit by loan losses and received a combined $90 billion in government bailout funds. JPMorgan Chase JPM has repaid the government funds it received, but still remains saddled with rising consumer loan losses. All three banks report results later this week.

In other earnings reports, health care products maker Johnson & Johnson JNJ said its second-quarter profit fell and server and software maker Sun MicrosystemsJAVA said it also expects results below estimates.

Johnson & Johnson's profit fell 3.5% due to lower sales, particularly for its prescription drugs, and the weak dollar.

Still, the world's most broadly based health care company handily beat Wall Street expectations, partly due to tight cost controls.

The maker of baby shampoo, contraceptives and biotech drugs earned $3.21 billion, or $1.15 a share. That was down from $3.33 billion, or $1.17 a share, a year ago.

Revenue totaled $15.24 billion, down more than 7%, on sharp drops in sales for two drugs with recent generic competition.

Sun Micro, which is being bought by Oracle in a $7.4 billion deal, predicts a loss of 24 cents to 34 cents a share in the quarter ended June 30. Excluding one-time items, Sun expects a loss of 6 cents to 16 cents a share.

Santa Clara, Calif.-based Sun Micro expects sales between $2.58 billion and $2.68 billion, down from $3.78 billion a year ago.

Analysts polled by Reuters, who typically exclude special items, forecast a loss of a penny per share on sales of $3.03 billion.