Lehman Brothers Announce Declined Income

by Stewart Douglas

Story link: Lehman Brothers Announce Declined Income

US based investment bank Lehman Brothers has today announced a decline in its income figures for the final quarter of the year, despite previous analyst forecasts that it would report much less strong results over the period.

The firm today announced that income from core businesses had fallen by 12% over the fourth quarter as compared to the period previous, taking the overall net income figure to $886 million, or £435 million, despite the fact that Lehman Brothers have come out of the sub-prime crisis relatively unscathed.

Largely as a result of writedowns in bond values, which accounted for the best part of $1 billion, revenues at the investment bank were down to $4.4 billion, despite strong continued growth in profits from its equity and options trading activities.

Whilst the firm has been reflected in a positive light in recent times as a result of its lack of exposure to sub-prime sector losses, shares today were down on the fears of growing problems within the industry generally, as well as off the back of the decline in profits announced by the bank today.

Speaking today on the performance, executive Richard Fuld said that the outlook for the firm looked favourable in spite of the current market conditions, in a bid to reassure shareholders and analysts alike.

 ”Despite what continues to be a difficult operating environment, the firm’s results for the quarter highlight our ability to perform across market cycles and deliver value to our shareholders.”

It remains to be seen whether the major US investment bank, one of the biggest in the country, can recover from the performance today, although it is submitted to still be performing ahead of previous analyst expectations.