|
Lehman 2Q tops forecast
|
 |
June 22, 1999: 10:16 a.m. ET
No. 3 brokerage posts $2.09-share earnings, above $1.68 consensus
|
NEW YORK (CNNfn) - Lehman Brothers Holdings Inc. once again exceeded Wall Street expectations Tuesday as the nation's third-biggest brokerage firm eked out fiscal second-quarter earnings 2 percent higher than what it made a year ago, setting a quarterly record.
Lehman (LEH) said per-share earnings for its second quarter ended May 31 were $2.09 a diluted share, well above the $1.68 a share consensus of analysts polled by First Call Corp.
The per-share figure was below the $2.12 a share reported a year earlier, even though net income rose to a record $330 million from $324 million, because of a larger number of shares outstanding and preferred dividend requirements. Those requirements included $50 million paid to American Express Co. (AXP), Lehman's former owner, and Nippon Life Insurance Co.
Net revenue for the quarter shrank slightly to $1.46 billion from $1.47 billion a year earlier.
Commissions from robust trading activity, which corresponded with the tumultuous stock and bond markets during the quarter, offset a decline in investment banking revenue, the company said.
"In the second half of 1998, we showed that the firm could be profitable in difficult market conditions," said Richard Fuld Jr., chief executive of the New York-based brokerage. "In the second quarter just ended, we demonstrated Lehman Brothers can be among the top performers in the industry in good market conditions."
Trading revenue rose 12.9 percent to $663 million, while commissions surged 35 percent to $168 million. Total trading revenue, which includes net interest income and commissions, rose 16 percent to $1.081 billion.
Offsetting those gains was a decline in revenue from investment banking which, including merchant banking, fell 6 percent to $467 million.
Trading volume leads to surprise
Lehman, dogged last year by false reports of its ailing financial health, has repeatedly surprised Wall Street's expectations, mostly because of surging trading volumes and stronger institutional sales of stocks and bonds.
That was evident in the company's six-month earnings. For the six months ended May 31, Lehman's earnings rose 6 percent to $540 million, or $3.66 a diluted share, from $511 million, or $3.57 a share in the year-earlier period. Revenue for the six months rose 2 percent to $2.57 billion.
Lehman shares were down 1 to 59-5/16 in early Tuesday trading, after surging 4-1/4 on Monday. Lehman rival Goldman Sachs (GS) reports its second-quarter results Wednesday; another brokerage, Morgan Stanley Dean Witter (MWD), reports its second-quarter earnings on Thursday.
|
|
|
|
|
|
Lehman Brothers
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
