Investment bank Lehman Brothers Holdings today posted a quarterly loss of $2.8 billion, matching its forecast, after recording massive trading and hedging losses.
With the results coming in as expected, analysts focused on the potential for future write-downs at the fourth-largest US investment bank, which still has more than $60 billion of mortgages, property assets and asset-backed securities on its books.
Lehman last week said it expected a quarterly loss, its first as a public company, and said it was raising $6 billion of fresh capital.
That news triggered a crisis of confidence in the company's management that brought Lehman shares down 20% for the week and spurred the demotion of Chief Financial Officer Erin Callan and Chief Operating Officer Joseph Gregory.
Lehman said it took $3.7 billion of write-downs during the quarter for assets including mortgage securities. Banks and other financial institutions globally have written down more than $400 billion of assets amid the credit crunch.
Although those write-downs have triggered big quarterly losses at rivals like Merrill Lynch, Lehman had until this quarter managed to avoid posting a net loss.
Lehman said its loss amounted to $5.14 a share for the fiscal second quarter ended May 31, compared with net income of $1.27 billion, or $2.21 a share, a year earlier.
The loss was Lehman's first since being spun off from American Express Co in 1994. The company's net revenue, affected by the write-downs, was a loss of $668m, compared with revenue of $5.5 billion a year earlier.
