Lehman's Earnings Jump 58%, Far Exceeding Estimates - TheStreet

Updated from 10:35 a.m. EDT

Buoyed by strong revenue gains in trading and merger advisory services, investment bank

Lehman Brothers

( LEH) reported Wednesday that its earnings jumped 58% in the latest quarter, easily topping Wall Street's estimates.

The New York-based financial firm also announced that its board of directors had approved a two-for-one stock split, payable Oct. 20 to shareholders of record on Oct. 5.

Shares of Lehman hit a 52-week high of $161 early last week on speculation the company would be sold amid a wave of consolidation among investment firms. The recent acquisitions of

J.P. Morgan

(JPM) - Get Report

and

Donaldson Lufkin & Jenrette

( DLJ) have put Lehman's independence in the spotlight.

Lehman finished Wednesday regular trading down 25 cents at $144.42.

Lehman said net income rose to $457 million, or $3.37 a share, up from $290 million, or $2.20 a share, a year ago. The results handily beat analysts' estimate of $2.75 a share, according to

First Call/Thomson Financial

.

Net revenue for the third quarter ending Aug. 31 reached $2.1 billion, up 51% from $1.4 billion in the comparable period of last year. Activities in Europe accounted for nearly a third of total revenue in the latest quarter.

Revenue from investment banking, the business of underwriting stock offerings and advising on mergers and acquisitions, increased 17% to $582 million, from $499 million a year earlier. Within the investment banking realm, revenue from advisory services climbed 62% to $227 million, the highest in Lehman's 150-year history, according to the company.

Revenue from the trading of stocks and bonds, meanwhile, more than doubled to $1.1 billion.

Richard Fuld Jr., Lehman's chairman and chief executive, said in a statement that in terms of revenue, the latest quarter was the second best in the firm's history. The strong revenue, Fuld said, reflects the balance the company has struck among its equity, fixed income and investment banking businesses.