Lehman Brothers and Goldman Sachs beat expectations

Source: Exec Digital USA

Date :3/18/2008 5:47:00 AM

The two Wall Street giants today posted first quarter losses that beat analyst’s estimates, but both have downplayed talk of a rapid upturn.

Lehman Brothers reported $489 million in profit for its first quarter, down 57 percent from the comparable period last year. This figure, which amounts to 89 cents a share on $3.5 billion in revenue, beat the expected profit of 72 cents a share.

Meanwhile, Goldman Sachs reported $1.51 billion in profit for its first quarter of 2008, its profit of $3.23 a share on $8.34 billion less than half of the $6.67 per share it earned in 2007, but still came in higher than the predicted $2.58 a share on $7.3 billion revenue.

This news comes amid widespread anticipation of a massive interest rate cut from the Federal Reserve, which has seemingly restored investor confidence enough to see the Dow Jones industrial average surge more than 200 points.

Salvage

A rate cut from the Fed would come just two days after the central bank relaxed its lending practices to try to revive stagnant credit markets and also backed JPMorgan Chase & Co.'s buyout of failing investment bank Bear Stearns.

Despite this glimpse of positivity, the chief executives of both firms claimed the market was still ‘challenging’.

“Although market conditions present many challenges at the moment, they also offer considerable opportunities,” Goldman’s chief executive, Lloyd C. Blankfein, said in a statement.

Lehman’s chief executive, Richard S. Fuld, said in a statement was equally cautious.

“In what remains a challenging operating environment, our results reflect the value of our continued commitment to building a diversified platform and our focus on managing risk and maintaining a strong capital and liquidity position,” he said.

March 18, 2008