Lehman profit rises 22 percent

NEW YORK (Reuters) - Investment bank Lehman Brothers Holdings Inc. (LEH.N: Quote, Profile , Research) on Thursday said fiscal fourth-quarter profit rose 22 percent with record revenue from virtually every business line, but investors expecting even better results sent its shares down in premarket trade.
Lehman, the fourth-largest U.S. securities firm by market value, said net income rose to $1 billion, or $1.72 a share, for the three months ended November 30, from $823 million, or $1.38, in the year-ago period. Net revenue rose 23 percent, to $4.5 billion.
The results exceeded the average analyst earnings forecast of $1.68 a share, according to Reuters Estimates, but it did so by the smallest margin in six quarters. Lehman shares fell 1.8 percent to $75.01 in premarket trading.
Wall Street firms in the quarter rebounded from a sluggish summer to cap off a record year amid robust M&A and leveraged buyout activity, stock and debt offerings and trading. For the year Lehman reported record profit of $4 billion with all-time high revenue and a return on equity of 22.3 percent.

Lehman's investment banking revenue rose 5 percent to a record $858 million, driven by strong debt and stock underwriting activity. Fees from merger and acquisitions, however, fell 7 percent.
Trading revenue rose 28 percent to $3 billion, fueled by robust fixed income markets and the firm's second-best stock trading quarter.
Money management and wealth management revenue surged 26 percent to a record $640 million, as managed assets grew to $225 billion from $207 billion in the third quarter.
These impressive results, though, paled when compared with Goldman Sachs Group, which on Tuesday reported a 93 percent jump in quarterly profit, record annual earnings and an ROE of 34 percent.
Bear Stearns Cos. ( which also reported results Thursday, said its profit rose 38 percent.
Lehman's shares were up 19 percent this year, compared with a 13 percent advance by the benchmark