A bit of good news Thursday from Lehman Brothers, which said it had beat analysts’ earning expectations for the quarter ended November 30. While fourth-quarter net income fell 12 percent to $886 million, or $1.54 a share, from $1 billion, or $1.72, a year earlier, Bloomberg reported that analysts had been expecting $1.44 a share. Nonetheless, the results are the first time in Lehman’s history that the investment bank has reported two consecutive quarters of profit declines. Fixed-income trading revenue fell 60 percent to $860 million, with Lehman citing “very challenging markets,” but the loss of revenue was more than offset by gains in equity trading, which saw revenues more than double to a record level of $1.9 billion. In spite of the results, there is still some uneasiness on the part of analysts, according to Bloomberg:

“They’re not as tied to fixed income as they used to be,” said Tom Jalics, an analyst at National City Bank in Cleveland who helps manage $34 billion, including Lehman shares. “But there’s a lot of skepticism about the numbers. People are concerned about possible skeletons in the closet.”

Jalics is referring to a large jump in so-called Level 3 assets at Lehman during the third quarter, which increased 57 percent to $34.7 billion. Level 3 assets are considered “hard to value” and include securities such as CDOs, which have been the subject of significant write-downs as of late.

Most Popular Articles

NAR bans “pocket listings”

The National Association of Realtors board of directors voted 729-70 on Monday to ban the controversial practice of “pocket listings.”

Nov 12, 2019 By

Latest Articles

Veteran homelessness drops 2% in 2019

This year there are 793 more veterans with a roof over their heads, according to the Annual Homeless Assessment Report from the U.S. Department of Housing and Urban Development. The report showed that in 2019, the number of veterans experiencing homelessness dropped by 2.1%.

Nov 14, 2019 By