Merrill Lynch & Co. Inc. (MER), the biggest U.S. brokerage, on Thursday said quarterly earnings rose, helped by rising trading revenue.

The brokerage, investment bank and asset manager said fourth-quarter earnings were $1.495 billion, or $1.51 a share, up from $1.19 billion, or $1.19 a share. a year earlier.

The earnings included a one-time income tax expense of $113 million, or 12 cents per share, associated with the company's repatriation of foreign earnings under a U.S. tax holiday.

Excluding that expense, the company earned $1.63 per share in the fourth quarter.

Analysts polled by Reuters Estimates had expected earnings before exceptional items of $1.30 per share.

Revenue rose to $6.8 billion in the quarter from $5.9 billion a year earlier.

Revenue from principal transactions, which includes investments and trading done with Merrill's own funds, jumped to $715 million from $309 million.

Merrill also said it raised its quarterly dividend by 25 percent, to 25 cents a share.

Merrill Lynch shares have lagged many of its investment banking peers as retail brokerage has been less lucrative than trading and institutional brokerage. But Merrill Lynch has been trading more of its own capital, and retail investors are growing increasingly active.

Merrill's shares have risen about 16 percent since the end of 2004, while the Amex Securities Broker Dealer Index has risen nearly 34 percent.