Lehman Sails Past Estimates (June 12, 2007) (LEH)

Lehman Brothers (LEH-NYSE) has reported Q2 2007 earnings.  The company posted $2.21 EPS and Revenues $5.51 Billion versus street estimates of $1.88 EPS and $4.97 Billion.  The results saw a 55% jump in investment banking, non-US revenues were 48% of total revenues, and it is expanding energy and commodities platform.  Capital Markets reported record net revenues of $3.6 billion in the second quarter, an increase of 17% from the second quarter of fiscal 2006, driven by a record performance in Equities Capital Markets; Fixed income revenues were $1.9 Billion, down 14% from Q2 2006.  Pre-tax margin grew 0.1% from Q2 2006 to 34.1%.

Chairman and CEO Richard S. Fuld, Jr.:"Our record results for the second quarter and the first half reflect our ongoing commitment to achieving diversified growth. With non-U.S. net revenues representing nearly half of our total net revenues for the quarter, our global platform is stronger and more balanced than ever. To build on this momentum, we remain focused on leveraging our resources and capabilities to maximize value for our clients and shareholders."

Book value was listed at the end of the quarter as $37.15, compared to a $75.68 close; shares are trading above $77.00 in pre-market trading.  Goldman Sachs (GS) and Bear Stearns (BSC) are set to report on Thursday morning, and shares of both are indicated higher in initial trades.

Jon C. Ogg
June 12, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.