Zacks Analyst Blog Highlights: Goldman Sachs Group, American International Group, Wendy's/Arby's Group, McDonald's and Burger King Holdings - Press Releases

For Immediate Release

Chicago, IL – August 12, 2010 – Zacks.com Analyst Blog features: Goldman Sachs Group Inc. (GS), American International Group Inc. (AIG), Wendy’s/Arby’s Group, Inc. (WEN) McDonald’s Corp. (MCD) and Burger King Holdings Inc. (BKC ).

Here are highlights from Wednesday’s Analyst Blog:

Goldman Reveals Derivatives Revenue

Goldman Sachs Group Inc. (GS) has revealed that 25% to 35% of its total revenue is gained from derivatives businesses, according to a report in The Wall Street Journal. The disclosure came in response to a request by the Financial Crisis Inquiry Commission (FCIC) related to its probe into the recent financial crisis.

In July 2009, a 10-member FCIC panel was appointed by the United States government to investigate the causes of the worst US financial and economic crisis since the Great Depression. The panel, led by chairman Phil Angelides and vice chairman Bill Thomas, is also examining the role of derivatives in aggravating the financial crisis. The FCIC has been asked to submit the report to the Congress by December 15.

Derivatives are contracts whose value is derived from assets such as stocks, bonds, currencies or commodities, or events such as changes in interest rates or the weather. Derivatives have been considered a major offender in intensifying the credit crisis, leading to the scrutiny of several other banks besides Goldman Sachs.

Goldman has already come under the FCIC scanner during the financial crisis for its derivatives contracts with American International Group Inc. (AIG), the insurer that was being bailed out by the US government.

On being requested by the panel, Goldman submitted information related to its derivatives holdings and operations from 2006 through 2009.

Statistics provided by Goldman indicates that its derivatives businesses produced $11.3 billion to $15.9 billion of the company’s $45.17 billion in net revenue for 2009. Additionally, according to a June report from the Office of the Comptroller of the Currency (OCC), the company held a gross amount of $49.1 trillion of derivatives contracts as of March 31, 2010.

For the first half of 2010, Goldman reported $11.8 billion in revenues from trading fixed- income, currencies and commodities and $3.57 billion from trading equities, which together accounted for 71% of the company’s net revenues of $21.6 billion.

Wendy’s/Arby’s Expands in Russia

Wendy’s/Arby’s Group, Inc. (WEN), the third largest quick-service restaurant company in the United States, has set its eyes on the Russian market for growth. The Russian market is one of the fastest growing markets; thereby enabling Wendy’s/Arby’s to benefit considerably from its long-term growth opportunities.

Just before its second-quarter earnings, Wendy’s/Arby’s announced that through its subsidiary Wendy’s/Arby’s International it has signed an agreement with local franchisee Wenrus Restaurant Group Limited, to open 180 dual-branded Wendy's and Arby's restaurants in Russia over the next 10 years. Wenrus is an affiliate of Food Service Capital, one of the largest players in the Russian hospitality industry. Food Service Capital runs 28 restaurants in Russia, the Ukraine and Britain, including Goodman Steak Houses.

Wendy's/Arby’s has limited presence in the international markets, which offers ample opportunities to enhance its reach. The company opened its first international dual-branded Wendy's and Arby's restaurant in Dubai, UAE in May 2010. This marked a milestone achieved by the company to broaden its global footprint. Wendy’s/Arby’s also plans to open 100 Arby’s restaurants over the next ten years in Turkey, 80 dual-branded restaurants in the Middle East/North Africa and 35 Wendy's in Singapore.

We see strategic growth opportunities at both Wendy’s and Arby’s brands, including international development under dual-brand restaurants. The dual-brand units, combining Wendy’s and Arby’s under one roof, can generate higher sales volumes and better return on investment.

Wendy's/Arby’s close competitor McDonald’s Corp. (MCD), the leading fast food chain operator, has 240 restaurants in Russia, and enjoys 70.0% market share of Russia's quick-service restaurant. Moreover, McDonald’s plans to open additional 45 restaurants in Russia. Wendy's/Arby’s other rival Burger King Holdings Inc. (BKC ) opened its first Russian restaurant in January and henceforth planning to open at least 5 restaurants within two years in Moscow.

The company will also announce its second quarter 2010 results on August 12, 2010.

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