{"id":577,"date":"2008-03-18T07:47:30","date_gmt":"2008-03-18T12:47:30","guid":{"rendered":"http:\/\/www.thedisciplinedinvestor.com\/blog\/2008\/03\/18\/lehman-read-between-the-lines\/"},"modified":"2008-03-18T07:47:30","modified_gmt":"2008-03-18T12:47:30","slug":"lehman-read-between-the-lines","status":"publish","type":"post","link":"https:\/\/thedisciplinedinvestor.com\/blog\/2008\/03\/18\/lehman-read-between-the-lines\/","title":{"rendered":"Lehman: Read Between the Lines"},"content":{"rendered":"<p>In the earnings news today, Lehman (LEH) Reports Q1 (Feb) earnings of $0.81 per share, <strong>$0.09 <font color=\"#228822\">better than<\/font><\/strong> the First Call consensus of $0.72; revenues fell 30.5% year\/year to $3.51 bln vs the $3.35 bln consensus.  What is meant by the word <em><strong>certain<\/strong><\/em>?<\/p>\n<blockquote><p><strong>LEH says liquidity pool of $34 bln and unencumbered assets of $64 bln, with an additional $99 bln at regulated entities, at quarter end.<\/strong> <strong>Net revenues for the first quarter of fiscal 2008 reflect negative mark to market adjustments of $1.8 bln<\/strong>, net of gains on certain risk mitigation strategies and certain debt liabilities.<\/p><\/blockquote>\n<p>Now for the bad news:<\/p>\n<blockquote><p>The Firm&#8217;s pre-tax margin was 18.9% for the first quarter of fiscal 2008, compared to 33.7% for the first quarter of fiscal 2007.<\/p><\/blockquote>\n<p>Shareholders are not going to be happy with this:<\/p>\n<blockquote><p>Return on average common equity was 8.6% for the first quarter of fiscal 2008, compared to 24.4% for the first quarter of fiscal 2007.<\/p><\/blockquote>\n<p>Still looking rough:<\/p>\n<blockquote><p>Return on average tangible common equity was 10.6% for the first quarter of fiscal 2008, compared with 29.9% for the first quarter of fiscal 2007.<\/p><\/blockquote>\n<p>That is a relief. So, if we calculate the value based on current accounting principals, the stock should be a buyout candidate close to&#8230; $3, $4 or maybe $50?:<\/p>\n<blockquote><p>Book value per common share was $39.45.<\/p><\/blockquote>\n<p>The point is that do we really think that any of this matters right now? I can&#8217;t make heads or tails of it, can you?<\/p>\n<p>(from <a href=\"http:\/\/www.briefing.com\" target=\"_blank\" title=\"Lehman Earnings\">briefing.com<\/a>)<\/p>\n<p>Disclosure: Clients of <a href=\"http:\/\/www.horowitzandcompany.com\" title=\"Horowitz &amp; Company\">Horowitz &amp; Company<\/a> do not hold positions mentioned as of the date of publish.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In the earnings news today, Lehman (LEH) Reports Q1 (Feb) earnings of $0.81 per share, $0.09 better than the First Call consensus of $0.72; revenues fell 30.5% year\/year to $3.51 bln vs the $3.35 bln consensus. What is meant by the word certain? LEH says liquidity pool of $34 bln and unencumbered assets of $64 [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[21,42],"tags":[487,192,490],"class_list":["post-577","post","type-post","status-publish","format-standard","hentry","category-short-ideas","category-stocks","tag-earnings","tag-financials","tag-stocks","et-doesnt-have-format-content","et_post_format-et-post-format-standard"],"acf":[],"_links":{"self":[{"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/posts\/577","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/comments?post=577"}],"version-history":[{"count":0,"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/posts\/577\/revisions"}],"wp:attachment":[{"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/media?parent=577"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/categories?post=577"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/tags?post=577"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}