Investment bank Lehman Brothers Holdings Inc. (LEH) said Thursday fiscal fourth-quarter profit rose 22 percent on strong underwriting fees and improved performance in its capital markets business.
The New York-based brokerage posted net income applicable to common shareholders for the three months ended Nov. 30 of $987 million, or $1.72 per share, compared with profit of $807 million, or $1.38 per share, in the year-ago quarter. Fourth-quarter revenue rose 23 percent to $4.5 billion from $3.7 billion.
Analysts expected the company to earn $1.68 per share in the fourth quarter, on revenue of $4.41 billion, according to a Thomson Financial survey.
Banking revenue rose 5 percent to a record $858 million, boosted by debt and stock underwriting. Revenue from advising on acquisitions fell 7 percent from a record quarter last year.
The capital markets segment posted a 28 percent jump in revenue to $3 billion as client activity was strong amid improved market conditions.
Investment management revenue rose 26 percent to $640 million, spurred by private investment management and asset management revenue.
Bear Stearns Cos. (BSC), the fifth-largest U.S. investment house, on Thursday reported robust capital markets and investment banking activity helped it achieve the best fourth quarter in the company's history.
The New York-based financial company reported profit attributable to common shareholders rose 38 percent to $557.6 million, or $4 per share, in the three months ended Nov. 30 from $401.5 million, or $2.90 per share, a year earlier. Revenue rose 28 percent to $2.4 billion from $1.9 billion.
The results surpassed Wall Street projections for earnings of $3.36 per share on $2.2 billion in revenues, according to analysts polled by Thomson Financial.
"We are pleased to announce Bear Stearns' fifth consecutive year of record net income and earnings per share," said Chairman and Chief Executive James E. Cayne in a statement.
Shares of the company closed at $155.89 Wednesday on the New York Stock Exchange, and are up about 17 percent during the quarter.