Earnings Decline for 3 Securities Companies

Three of the nation’s major brokerage firms on Thursday reported sharp declines in fourth-quarter profits, hurt by a slump in the investment banking and stock trading businesses.

But the earnings figures reported by Goldman Sachs Group Inc., Lehman Bros. Holdings Inc. and Bear Stearns Cos. either met or exceeded analysts’ expectations, according to consensus estimates by Thomson Financial/First Call.

The firms announced their earnings a day after Morgan Stanley detailed a similar performance.

A.G. Edwards Inc., a smaller brokerage, also reported an earnings decline and said it will cut jobs as part of an effort to stem declining profit.

Goldman Sachs said its net income for the quarter ended Nov. 30 fell 17% to $497 million, or 93 cents a share, down from $601 million, or $1.16, a year ago. But the results exceeded the 90-cent estimate by a consensus of analysts.

Net revenue rose to $3.43 billion from $3.42 billion.

“Looking ahead, while we remain cautious about the near-term operating environment, we are confident in the strength of our franchise and the firm’s longer-term growth prospects,” said Chairman and Chief Executive Henry M. Paulson.

Revenue at Goldman’s investment banking business fell 35%.

That was partially offset by a 17% rise in revenue in the asset-management and securities-services business and a 22% rise at its trading and principal-investments business.

Lehman Bros. said its net income, including costs caused by dislocation of many of its employees and operations after the Sept. 11 terrorist attacks, fell 67% to $130 million, or 46 cents a share.

Excluding the costs, earnings were $201 million, or 73 cents, in line with analysts’ expectations.

Net revenue fell 29% to $1.20 billion.

Bear Stearns said net income fell 21% to $154.9 million, or $1.08 a share, but the results exceeded analyst forecasts of 87 cents. Net revenue fell 19% to $1.1 billion.

A.G. Edwards said earnings dropped 61% to $22.2 million, or 28 cents a share, citing a weak economy worsened by the terrorist attacks. Analysts were expecting 43 cents.

The company said specifics of the job cutbacks have not been determined. Job reductions will be achieved through voluntary retirements, attrition and some layoffs.

Revenue fell 12% to $556 million, with commission-based revenue down 26%.