The New York-based firm said it made $26 million, or 47 cents a share, for the quarter ended March 31, compared with the year-ago $20 million, or 51 cents a share. Revenue rose to $369 million from $336 million a year earlier.
Analysts surveyed by Thomson Financial were looking for a 62-cent profit on revenue of $423 million.
"Our results are best measured on an annual basis rather than on any single quarter," said Vice Chairman Steven Golub. "This year our backlog for completion of transactions seems to be weighted toward the second half of the year. We continue to focus on controlling costs. The increase in our non-compensation expense was impacted by, among other factors, one-time cost recoveries in the first quarter of 2006. We remain confident that the operating leverage in our business model will continue to yield long-term positive results."
Shares fell $2.88 to $51.02 in premarket trading.