Bear Stearns Cos. today reported its third quarter profits plunged 62% following this summer’s collapse of two of its hedge funds, which Bear blames for $200 million of that drop.
Third-quarter net income dropped 61% to $171.3 million, or $1.16 a share in Q3. That’s down from $437.6 million one year ago, Bear Stearns said in a statement.
Meanwhile, Bear’s revenue from fixed-income sales and trading also caused a dent in Q3 revenue, falling 88% (to $117.6 million) compared to the same time period last year.
Bear’s CEO James Cayne called the current market conditions “extremely challenging.”
Meanwhile, the Wall Street firm also announced a $2.5 billion stock-buyback plan in an effort to boost share prices.