The trickle of information coming from Lehman Brothers has burst into an out-of-control fire hose.

Lehman has stunned Wall Street by announcing that it expects a loss of $2.8 billion, or $5.14 per share, in the second quarter. The loss, the firm's first since it went public in 1994, is much wider than forecasts of $300 million and $400 million.

"Even David Einhorn probably wasn't expecting numbers that bad," says Felix Salmon.

The loss reflects a write-down of assets, trading losses, and losses on hedges. While having more diverse businesses than Bear Stearns, Lehman is still primarily a fixed-income trading house. Fixed income had net revenue (revenue minus interest expenses) of negative $3 billion, compared with net revenue of $1.9 billion in the quarter a year ago.

"How Lehman managed expectations so badly when they were out in the middle of a huge P.R. blitz is a big open question," notes Yves Smith on the Naked Capitalism blog.

Questions about how Lehman got this quarter so wrong will be certain to come up in a conference call this morning. This will be a do-or-die performance by Richard Fuld, Lehman's chief executive, to persuade the doubters that Lehman can survive on its down.

In a sign that Lehman does have its supporters, the firm also says that it plans to raise $6 billion through offerings of common and convertible preferred stock.  

While Lehman did not disclose whether it has buyers lined up, Susanne Craig of the Wall Street Journal says that the $80 billion New Jersey pension fund, which recently invested in Merrill Lynch, and C.V. Starr, controlled by Hank Greenberg, former chief executive of American International Group, will be among the investors.

The firm did highlight some positive results: Its liquidity pool increased to $45 billion from $34 at the end of the first quarter; gross leverage was reduced to 25 times equity from 31.7 times equity in the first quarter; and the firm reduced its exposure to mortgages and real estate investments by 15 to 20 percent.

Moody's Investors Service has lowered its rating outlook on the firm to "negative" from "stable."