Lehman Bros. Reports 2Q Loss Of $2.8B; Shares Rise Over CEO Confidence

June 16, 2008 12:28 p.m. EST

New York, NY (AHN) - Lehman Brothers Holdings Inc. on Monday reported a second-quarter loss of $2.77 billion, but Chief Executive Officer Richard Fuld still expressed confidence in the firm's economic outlook.

Lehman posted a $5.14 a share loss, compared to its profit of $1.3 billion or $2.21 a share, as was expected by market analysts.

The latest net income loss is the first quarterly loss since the firm went public in 1994.

Stocks of the company gained even after the firm slashed mortgage holdings 20 percent in the second quarter to prevent further damage from the credit-market collapse.

Shares of the New York-based brokerage firm were pushed up by 6.6 percent or $1.71 to $27.52 in New York trading Monday.On Friday, Lehman stock closed at $25.81.

Last week, the firm reported the replacement of Chief Financial Officer Erin Callan and President Joseph Gregory as it struggled to improve its balance sheet this year.

Recently, the Standard & Poor's has slashed credit ratings of Lehman Brothers down to "A" from "A+", reporting that the securities firm is likely to again writedown the value of their assets.

The securities firm along with other financial institutions has suffered after the begining of a subprime mortgage crisis last summer, which led to the slowdown in the credit market as well creating a global financial slowdown in major economies.