LEH beat the street:
UPDATE) Lehman Brothers' 2nd-Quarter Earnings Shatter Street Estimates
Dow Jones Online News, Tuesday, June 22, 1999 at 09:29
NEW YORK -(Dow Jones)- Lehman Brothers Holdings Inc. Tuesday reported
second-quarter earnings that easily beat expectations on strong results
in its global equities business.
The securities firm (LEH) reported net income of $330 million, or
$2.09 a diluted share, compared with year-ago net of $324 million, or
$2.12 a diluted share. The mean estimate of 11 analysts surveyed by
First Call was for earnings of $1.68 a share in the quarter ended May
31.
Total revenue fell 11% to $4.93 billion. Net revenue, which is total
revenue minus interest expense, slipped 1.2% to $1.46 billion. Return on
common equity fell to 26.3% from 29.9%, while the company's pretax
margin slipped to 32% from 32.4%.
Principal transaction revenue jumped 13% to $663 million, but
investment banking revenue fell 5.7% to $467 million.
Lehman's latest quarter competed with an exceptional year-ago period
in which it participated in several highly profitable merchant banking
and investment banking deals, including Starwood Hotels & Resorts
Worldwide Inc.'s acquisition of ITT Corp.; Texas Utilities Co.'s
acquisition of the Energy Group; and Premier Parks Inc.'s acquisition of
Six Flags Entertainment Corp. Each of those deals allowed Lehman to bank
revenue in several business lines at once, including mergers and
acquisitions and high yield.
Lehman is the first major Wall Street firm to report second-quarter
results. Goldman Sachs Group Inc. (GS) and Morgan Stanley Dean Witter &
Co. (MWD) are scheduled to announce earnings on Wednesday and Thursday,
respectively.
Copyright (c) 1999 Dow Jones & Company, Inc.
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