Bear Stearns Cos., the securities firm that helped trigger the collapse of the subprime market, reported its first-ever loss after writedowns for mortgage holdings and declines in trading and investment banking.
The fourth-quarter loss of $854 million, or $6.90 a share, was almost four times wider than the average estimate of analysts surveyed by Bloomberg. Bear Stearns fell as much as 2.9 percent in New York Stock Exchange composite trading.
Chief Executive Officer James ``Jimmy'' Cayne and senior managers will forgo bonuses for the year after producing ``unacceptable results,'' he said today in a statement. The $1.9 billion writedown wiped out the New York-based company's revenue for the three months ended Nov. 30. Lehman Brothers Holdings Inc., Morgan Stanley and Goldman Sachs Group Inc. posted
gains for the quarter from trading stocks and advising on mergers.
``We had weak trading results in a number of businesses, and the size of our fee-based businesses aren't large enough to offset that,'' Bear Stearns Chief Financial Officer Sam Molinaro said today in a conference call with analysts.
Return on equity dropped to 1.8 percent for the year from 19 percent in 2006. Morgan Stanley reported a 7.8 percent return; Lehman generated 21 percent. Goldman Sachs delivered 33 percent for the year.
Bear Stearns has ``a myriad of problems,'' said Tom Jalics, an analyst at National City Bank in Cleveland, who helps manage $34 billion, including Bear Stearns shares. ``They're not as diversified, they don't have a big overseas presence, big investment banking or equities presence.''
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