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Lehman posts record 25% gain in profit

(AP) — Quarterly earnings at Lehman Brothers Holding Inc. climbed 25%, setting a new record for both profits and revenues on strong results from the Wall Street firm's investment banking and equities trading businesses.

For the quarter ending Feb. 28, Lehman Brothers earned $1.07 billion, or $3.66 per share, compared with $856 million, or $2.91 per share, a year earlier.

The results include a one-time gain due to accounting changes that added $47 million, or 16 cents per share, to the company's results. Revenue rose 17%, to $4.46 billion. Analysts surveyed by Thomson Financial had forecast earnings of $3.17 per share on revenue of $4.17 billion.

Investment banking revenue rose 22% to $835 million, the third consecutive quarter of record income for the division. The increase came largely due to record activity in corporate debt underwriting.

Within Lehman's capital markets division, equity revenues surged 52% to $944 million as the company took advantage of strong gains in the stock market during the quarter. Fixed-income revenue, which includes bonds, real estate and credit trading, rose 2% to $2.1 billion.

Lehman's investment management arm saw revenue rise 33% to $580 million as the company saw more customer money flow into its mutual funds and private asset management accounts.
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