Lehman and Goldman Earnings Exceed Forecasts

US stocks rally strongly after the announcement of better-than-forecast earnings results from Lehman Brothers and Goldman Sachs. Lehman [[leh]], the fourth-largest US investment bank, said it earned $489 million, or 81 cents a share, compared with earnings of $1.15 billion, or $1.96 a share, in the same quarter last year. This beat analysts’ estimate of earnings of 73 cents a share. So even though first-quarter earnings have declined sharply, they aren’t as bad as many have feared, especially following Bear Stearn’s spectacular collapse. Lehman stocks gained 13% in pre-market trading after losing 19% on Monday, but has rallied as much as 40% after the earnings release.

Shares of Goldman Sachs [[gs]], the largest securities firm, rallied the most in more than seven years. Net income fell to $1.51 billion, or $3.23 a share from $3.2 billion, or $6.67, a year earlier. The average forecast was for $2.59 a share.

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