First-quarter net income for Lehman Brothers came in at $670 million, or $2.21 per share, as compared to $301 million, or $1.15 per share in the same quarter last year. Analysts were anticipating net income of $1.66 per share. Net revenue soared 84% to $3.14 billion.
Foolish colleague Rick Munarriz suspected as much yesterday, as he outlined the string of investment banks reporting earnings. Others on the roster for the coming week include Bear Stearns
Meanwhile, online brokerage Charles Schwab
None of this is any great surprise, given the recovering economy and renewed interest in the stock market. Indeed, Lehman's robust numbers give good reason for investors to suspect a string of similar reports this week.
However, many investors already anticipated this type of success as trends improved over the last year. The above-noted firms are all trading near their 52-week highs. Investment banking firms are profiting from the recovery, and investors who placed that bet over the last couple years, when things were bleak, are happy ones indeed. At this point, though, whether record-breaking numbers like Lehman's are sustainable or a leap of faith remains an issue. After all, some possible chinks in the economic recovery remain, including a continued weak job outlook.
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Alyce Lomax does not own shares of any of the companies mentioned.