Lehman Brothers posted a 3.2% decline in quarterly earnings Tuesday as the U.S. investment bank wrote down mortgage and leveraged loan assets, but the results beat expectations and its shares jumped before the market opened.
The decline in earnings, Lehman's first quarterly decrease in five years, comes as the U.S. subprime mortgage crisis spreads to other markets, leaving many investment banks with
assets that weren't as valuable as they were before.
"A slight decline (in earnings) is a pretty admirable showing in this environment," said Ned Riley, head of Riley Asset Management in Boston.
The fourth-largest U.S. investment bank by market capitalization said its earnings were $887 million, or $1.54 a share for the quarter ended Aug. 31, compared with $916 million, or $1.57 a share in the same quarter last year.
Analysts had on average expected earnings of $1.47 a share, according to Reuters Estimates.
Lehman's shares rose sharply in reaction to the news.