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Brokers beat Street
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January 4, 2001: 9:53 a.m. ET
Lehman Bros., Bear Stearns both top Wall Street's 4Q earnings forecasts
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NEW YORK (CNNfn) - Lehman Brothers Holdings Inc. and Bear Stearns Cos. Inc., two of largest U.S. brokerage houses, overcame a difficult trading environment on Wall Street to post fourth-quarter earnings that easily topped analysts' expectations Thursday.
Lehman used a surge in investment banking income to post a profit of $399 million, or $1.46 per diluted share, for the period ended Nov. 30. That marked a 33 percent increase above the $301 million, or $1.14 per share, it earned a year earlier and easily surpassed the $1.26 per share profit analysts polled by research firm First Call Corp. expected.
Revenues for the quarter reached $6.4 billion, up 36 percent, as Lehman posted a 28 percent increase in investment banking revenues despite a significant industry-wide slowdown in merger advisory and IPO underwriting activity during the period.
 Lehman finished as the No. 10 advisor on worldwide mergers and acquisitions completed during 2000, based on data compiled by Thompson Financial Services Data, and as the No. 6 underwriter of U.S. IPOs, according to Commscan.
"In what was clearly one of the most difficult operating environments in several years, Lehman Brothers posted significant year-over-year increases in the fourth quarter," said Richard Fuld, Lehman's chairman and chief executive, in a prepared statement.
For the full year, Lehman (LEH: Research, Estimates) earned $1.78 billion, or $6.38 per diluted share, up from the $1.13 billion, or $4.08 per share, it earned a year earlier.
Bear Stearns overcomes banking slowdown
Meanwhile, Lehman's cross-town rival Bear Stearns managed to surpass earnings estimates by a wide margin thanks to a significant improvement in its institutional equities and fixed income divisions.
The New York-based brokerage posted a profit of $195.2 million, or $1.36 per share, for the period ended Nov. 30, significantly higher than the $1.11 per share profit analysts polled by First Call expected. Bear Stearns earned $207.5 million, or $1.32 per share, during the same period last year.
 Net revenues for the company climbed 20 percent to $277.8 million during the quarter, driven mainly by double-digit improvements in its institutional equities and fixed income sales, which climbed 19 percent and 28 percent respectively.
However, the company's investment banking revenues fell more than 25 percent during the quarter to $229 million led by a decline in IPO underwriting and merchant banking activity.
For the full year, Bear Stearns (BSC: Research, Estimates) earned $869.2 million, or $5.98 per share, up from the $826.6 million, or $5.33 per share, it earned a year earlier.
In Thursday morning trading, Lehman shares rose $1.75 to $77.88, while Bear Stearns climbed $2.06 to $56. 
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