Lehman Brothers Holdings Inc. posted a nearly $3 billion loss Monday, after the nation's fourth-largest investment bank was hurt by wrong-way hedging and trading positions.
The results marked the first time that Lehman Brothers recorded a loss since going public in 1994, and confirmed what the company had forecast last week. It follows a tumultuous week in which Lehman also was forced to raise $6 billion in fresh capital, and unexpectedly demoted two of its top executives.
Lehman did not announce any new plans to raise capital. However, Chief Executive Richard Fuld said the firm has already begun to take steps to "ensure that this quarter's unacceptable performance is not repeated."
The company reported a loss of $2.87 billion, or $5.14 per share, compared with a profit of $1.26 billion, or $2.21 per share a year earlier. Revenue plunged to negative $668 million from last year's $5.51 billion.
Global banks and brokerages have written down nearly $300 billion worth of assets because of exposure to risky mortgage-backed securities. Lehman's business model was considered the most similar to Bear Stearns, which in March was saved from collapse through an acquisition by JPMorgan Chase & Co.
Lehman said it has continued to cut its exposure to residential mortgages, commercial mortgages and real estate investments. It said exposure has been cut by 20 percent in those areas, even more than the 15 percent it projected last week.
Shares of the company, which last week plunged by 30 percent before rebounding on Friday, moved higher in morning trading.
Last week, Lehman shuffled its top management in a bid to restore investor confidence. Chief Financial Officer Erin Callan and Chief Operating Officer Joseph Gregory were both ousted from their jobs.
Callan, who took the job in December, was one of the highest ranking women on Wall Street. Gregory had been with Lehman for three decades, and considerd to be a close confidant to Fuld.
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