Last week, it was Goldman Sachs (GS); this Thursday, it’s analysts at Fox-Pitt Kelton Cochran Caronia Waller and Keefe, Bruyette & Woods that are the latest to come to the realization that Q3 earnings aren’t exactly to come out smelling like roses among most in the financial sector. Analysts for both companies cut their third quarter and full-year estimates for Morgan Stanley (MS), Goldman Sachs (GS) and Lehman Brothers Holdings Inc. (LEH). Fox-Pitt Kelton analyst David Trone pegged $6.1 billion in net write-downs across the three companies for Q3, citing leveraged loans as well as commercial and residential mortgages. Trone also singled out Alt-A mortgages as particularly problematic, MarketWatch reported Thursday morning. Lehman, in particular, has been the subject of the most mortgage-led speculation given to any company not named Fannie Mae (FNM) or Freddie Mac (FRE) these days. A team of analysts at JP Morgan estimated a week ago that Lehman could face up to $4 billion in write downs when it reports Q3 earnings. Lehman absorbed $2.4 billion in write-downs to its residential mortgage-related positions in Q2; the firm reduced its residential mortgage exposure from $31.8 billion to $24.9 billion during the quarter. MBS and ABS assets remain dominant on Lehman’s overall book, as well, valued at $72.5 billion of the company’s $248.7 billion in total assets at the end of May; the second-largest asset category is the firm’s corporate debt, by comparison, which represents $50 billion. KBW analysts similarly cut estimates for Lehman, Goldman and Morgan Stanley. “Given the uncertain recovery we have also lowered 2009 estimates and adjusted price targets,” the analysts are quoted as saying by MarketWatch. “Caution is warranted if investing in these names as volatility remains intense.” Today’s analyst updates come on the heels of a move by Goldman Sachs analysts last week, who said then that recovery “is still a few quarters away, as we anticipate additional asset sales and write-downs in coming quarters throughout the financial-services sector.” Some of HW’s sources have been even far more dire in their private assessments; some analysts have suggested in recent weeks that the real work of deleveraging for many on the Street has yet to begin, despite press given to recent efforts in this area so far this year. Despite concern over financials, the Dow Jones Industrial average was at 11,601.11, up 98.6 points or 0.86 percent, when this story was published. A significant uptick in second quarter GDP helped offset any market concerns over upcoming earnings or a potential pressure point on oil due to inclement weather in the Gulf of Mexico. Disclosure: The author was long FRE and held no other relevant positions when this story was published; indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.