Bear Stearns 1Q Profit Misses Views

The nation's fifth-largest investment bank posted results just shy of Wall Street projections. Earnings for the quarter ended Feb. 29 showed Bear Stearns was able to stay profitable as the credit crisis roiled on.

Bear Stearns Chief Executive Alan Schwartz repeatedly stated that the investment bank's books were in order during the first week of the new quarter. But, speculation about financial constraints ultimately caused a crisis of confidence in the bank and the Federal Reserve orchestrated its fire sale to JPMorgan on March 17.

The company posted a profit of $110 million, or 86 cents per share, down from $548 million, or $3.82 per share, a year earlier. Revenue fell to $1.48 billion from $2.48 billion a year ago.

Analysts polled by Thomson Financial projected a profit of 87 cents per share on $1.35 billion of revenue. The results were released in a filing with the Securities and Exchange Commission.

Bear Stearns did not disclose any losses since the first quarter ended. Its sale for $10 per share well below the company's value of $159.36 per share a year ago is expected to be completed by June.

Spokesmen for both companies declined to comment.

Bear Stearns also announced that the Securities and Exchange Commission is considering a civil injunctive action or an administrative hearing regarding the company's bidding process with municipal securities. The company said it would respond to the so-called "Wells notice" and will discuss the matter with staff before its official response to the regulator.

In addition, Bear Stearns said its EMC Mortgage Corp. subsidiary has been cooperating with an investigation by the Federal Trade Commission over its business practices.

Bear Stearns shares fell 11 cents to $10.11 Monday before the results were released.