Lehman Brothers, which yesterday lost 19% of its market value, today reported a 57% drop in net income for the first quarter and a 31% drop in net revenue. But those dire figures still beat analyst forecasts, sending the stock up 12% in premarket trading, the Wall Street Journal reports. The earnings were brought low by a $1.8 billion mortgage writedown.
That writedown knocked the fixed-income figures down 88%, and capital market revenue fell 52%, but other businesses grew, Bloomberg reports. “The game here is confidence,” said one expert. “The profit figures depend on how illiquid assets are marked to market, and investors don't trust those numbers.” Another analyst put it bluntly: “Lehman is not Bear.”