Snappy newsletters. Simple Facebook sharing. Spirited comments. Sweet features are waiting… GET THEM NOW!

Hot on Facebook
Guy Buys $123 Safe on eBay, Finds $26,000 Inside Seller tries to get half the cash back, fails »

Bear Stearns Posts First Loss

Subprime writedowns hobble 'bond shop,' loss almost four times what analysts expected

By Kevin Spak,  Newser Staff

Posted Dec 20, 2007 9:19 AM CST
Email

(Newser) – Analysts expected Bear Stearns to post its first-ever loss today, they just expected it to be smaller. After $1.9 billion in subprime writedowns, the company posted a $6.91 loss per share, dwarfing the $1.82 analysts predicted. Executives gave up their bonuses, as revenue from debt sales and trading were wiped out, Bloomberg reports. “They’ve got a myriad of problems,” one analyst said.

The writedowns eclipsed the company’s $1.2 billion forecast. While many of the firm’s competitors have taken bigger hits, Bear Stearns’ stock has fallen further because of over-reliance on fixed-income. “Their problem is they're not as diversified,” an analyst explained. “They’re kind of a bond shop.” A recession would likely help the company, slowing rivals and increasing the price of bonds.

This is an undated handout file photo of Bear Stearns Cos. Inc. chief executive James E. Jimmy Cayne. (AP Photo/HO/Bear StearnsCos. Inc., file)
This is an undated handout file photo of Bear Stearns Cos. Inc. chief executive James E. "Jimmy" Cayne. (AP Photo/HO/Bear StearnsCos. Inc., file)   (Associated Press)
The headquarters for securities firm Bear Stearns is shown March 16, 2006 in a New York file photo. Bear Stearns Cos., the fifth-biggest U.S. investment bank, said Thursday, June 14, 2007 fiscal second-quarter profit sank as a downturn in the U.S. mortgage market slammed the company's business of...
The headquarters for securities firm Bear Stearns is shown March 16, 2006 in a New York file photo. Bear Stearns Cos., the fifth-biggest U.S. investment bank, said Thursday, June 14, 2007 fiscal second-quarter...   (Associated Press)
The logo for Bear Stearns is shown at its corporate headquarters in New York, in this July 18, 2007 file photo. Bear Stearns Cos., the nation's fifth-largest investment bank, on Wednesday, Nov. 28, 2007 said it will cut 4 percent of its staff in further fallout from the summer's mortgage...
The logo for Bear Stearns is shown at its corporate headquarters in New York, in this July 18, 2007 file photo. Bear Stearns Cos., the nation's fifth-largest investment bank, on Wednesday, Nov. 28, 2007...   (Associated Press)
« Prev« Prev | Next »Next » Slideshow
To report an error on this story, notify our editors.
A snapshot of the day's best news stories.
 
COMMENTS
Be the first to comment on this story.

Barclays sues Bears
MarketWatch

A bear of a quarter for brokers
Wall Street Journal

 
subprime mortgages • Bear Stearns • earnings reports • quarterly reports • writedowns

More Newser Stories

Morgan Stanley Stuns With $9.4B in Writedowns

Mortgage Trouble Rattles Wall Street

First Major Financial Crisis Trial Begins

Tech Snaps Nadaq's Streak; Dow Climbs 24

Apple Earnings Up 15% on iPhone, Mac Success
NEWS FROM OUR PARTNERS
Other Sites We Like:   24/7 Wall St.   |   Betty Confidential   |   BuzzFeed   |   Cracked   |   Fark   |   Timelines   |   The Frisky   |   Geek Sugar   |   NewsOne