NEW YORK (CNN/Money) - Bear Stearns & Co.'s third-quarter profit jumped 22.2 percent from a year earlier, beating Wall Street forecasts by a penny a share as the investment bank kept a tight hold on expenses.

Bear Stearns and other banks have been struggling all year as investors continue taking the sidelines amid uncertainty over the economy, the war on terrorism and corporate scandals that have sent the markets on a seesaw over the last few months.

Brokerage stocks took a hit Tuesday following a warning from J.P. Morgan Chase & Co. (JPM: down $2.46 to $19.09, Research, Estimates) that third-quarter earnings will be lower than second-quarter results amid weak trading. Its troubles helped send shares of Bear Stearns (BSC: down $0.30 to $59.20, Research, Estimates) and other banks lower Wednesday.

For the latest quarter, Bear Stearns earned $164.4 million, or $1.23 a share, up from $134.6 million, or 95 cents, a year earlier. Analysts polled by earnings tracker First Call anticipated $1.22 a share profit.

Third-quarter revenue slipped to $1.15 billion from $1.2 billion.

The firm also raised its quarterly dividend by 13 percent to 17 cents a share.

"Operating profits were up, despite a decline in net revenues, largely due to the fact that expense reductions from our margin improvement program have now been realized and incorporated into our earnings," CEO James Cayne said.

Investment banking revenue tumbled 37.3 percent in the quarter, reflecting both decreased investor activity and slower merger and initial public offering activity.

However, customers continued to take out mortgages, helping send fixed income segment revenue 2.8 percent higher.

Private client revenue was little changed and management fee revenue declined with fewer assets under management at the end of the quarter.

Bear Stearns cut non-interest expenses 9.1 percent in the quarter.

Compensation as a percent of net revenue was 51.6 percent for the period compared with 52.7 percent a year earlier.

Revenue held up relatively well, especially in light of J.P. Morgan Chase's profit warning Tuesday, Jeffery Harte, an analyst who follows Bear for Sandler O'Neill & Partners LP, told Reuters Wednesday.