Bear Stearns Cos., the nation’s seventh-largest brokerage, reported Thursday that strong equities trading and fixed income revenue lifted second-quarter profit by 83 percent to beat Wall Street expectations by a wide margin.
Net income applicable to common shares grew to $558.2 million, or $3.72 per share, from $309.7 million, or $2.09 per share, in the same quarter last year. Revenue surged 33 percent to a record $2.5 billion from $1.87 billion in the year-ago period.
Wall Street had projected second-quarter earnings of $3.12 per share on $2.11 billion of revenue, according to analysts polled by Thomson Financial.
“The first half of 2006 has proven to be our best ever,” said Chairman and Chief Executive James E. Cayne in a statement. “Our success in increasing the depth and breadth of our business both domestically and internationally has fueled our enthusiasm and appetite for further growth.”
Bear Stearns follows Goldman Sachs Group Inc. and Lehman Brothers Holdings Inc. in posting near-record profits during the quarter, yet still below the blockbuster returns seen during the first quarter. Shares of securities firms have slumped this week on concern of how a market downturn might eat into profits, especially as the industry heads into the historically sluggish summer period.
However, record fixed income revenue — one of the New York-based investment house’s biggest businesses — came in higher than Wall Street expected. As a result, investors snapped up shares of Bear Stearns — sending it higher by $4.10, or 3.3 percent, to $128.30 in premarket trading.