Wednesday, September 10, 2008

$3.9 Billion Loss for Lehman Bros. In Expected Third Quarter Results

Lehman Brothers' stock lost 45% of its value on Monday, after talks fell through with a Korean Bank, for purchase and infusion of capital. In an effort to keep some sort of perceived value for the company, they will reveal their expected Q3 earnings today, rather than later this month.

The PDF, entitled LEHMAN BROTHERS ANNOUNCES PRELIMINARY THIRD QUARTER RESULTS AND STRATEGIC RESTRUCTURING is available here.

These are the "highlights":

*Estimated Net Loss of ($3.9) Billion or ($5.92) Per Common Share (Diluted)

* Significant Reduction in Residential Mortgages, Commercial Real Estate and Other Less Liquid Assets

  • Residential Mortgage Exposure Reduced by 47% to $13.2 B, Pro Forma for Pending UK Mortgage Transaction
  • Commercial Real Estate Exposure Reduced by 18% from $39.8 B to $32.6B

* Spin-off to Lehman Brothers’ Shareholders of Vast Majority of the Firm’s Commercial Real Estate Assets into a New, Separate Public Company

*Annual Dividend to be Reduced to $0.05 Per Share


Update 1:

WSJ Deal Journal LiveBlogged the Conference Call.

For analysis, see WSJ Heard On the Street column, "Lehman Lurches Into Endgame."

See CalculatedRISK's take here and here, and be sure to read the comments. The second link also has instructions on how to listen to this morning's conference call, which will remain available to the public until September 17.

2 comments:

Anonymous said...

It will be interesting to see if Lehman borrows from the fed to make it through Q3. This is a possibility but would signal shareholders that it's time to dump. So they're really in a bind. Can't raise, can't sell, and no treasury bailout.

everybody knows said...

they're gonna be used as the example of "moral hazard" and allowed to fail.

just watch--lehman's going down.

worth 5B right now, but worth 10x that a year ago.

stupid real estate "investments."