Lehman Brothers Holdings on Wednesday said quarterly profit rose a stronger-than-expected 74 percent on the back of robust stock and bond underwriting and a surging mortgage bond business.
Kicking off what is expected to be Wall Street's second-best quarter ever after an unusually active summer, Lehman said fiscal third-quarter net income rose to a record $879 million, up from $505 million a year earlier.
Fixed-income revenues rose 37 percent, helped by the bank's commercial and residential mortgage-related businesses. At the same time equity underwriting revenue nearly doubled .
Lehman, the first US investment bank to report quarterly results, said it advised on three of the largest completed merger and acquisitions deals for the quarter.
Looking ahead, Lehman said its banking pipeline was the best ever.
Earnings per share in the quarter ended August 31 rose to $2.94 from $1.71 a year ago, topping analyst expectations of $2.35 per share, according to Reuters Estimates.
Net revenue rose 47 percent to $3.9 billion.
Capital markets net revenue rose 49 percent, to $2.5 billion, helped by the bank's commercial and residential mortgage and real estate businesses and improved credit and interest rate product sales.
Investment banking revenue increased 55 percent to $815 million, driven by all-time high debt-origination revenue, strong equity underwriting, and revenue from advising on mergers and acquisitions.
Net revenues from underwriting stock offerings nearly doubled to $637 million.