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Banking, finance, and taxes

Lehman Earnings, Rewards For Bad Behavior (LEH)

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By Douglas A. McIntyre Published
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Lehman Brothers (NYSE: LEH) has finally pre-announced its earnings at -$5.92 EPS.  First Call had estimates at worse -$3.00 but no one is using that estimate based upon the recent mudslide and rumors. The company is selling a majority stake in its Neuberger Berman asset management unit and said it was going to spin off its commercial mortgage assets to shareholders and will have limited exposure there.  It also cut its annual dividend to $0.05 and the company is exploring strategic alternatives.

Lehman is also saying its tier-1 capital ratio is 11% and is taking $5.3 billion in gross residential mortgage related adjustments. Its gross mark to market adjustments are a negative of $7.8 billion and net mark to market adjustments were $5.6 billion.

Shares closed way down yesterday at $7.79 and are trading around $8.70 in the early pre-market hours.  While it’s up now, this is anyone’s guess after the recent slide.  It doesn’t sound like it has any merger deal being imminent based on the data seen so far. Dick Fuld’s days appear very limited.

Jon C. Ogg
September 10, 2008

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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