Bear Stearns’ Operating Profit Jumps 8%

Bear Stearns Cos. said operating profit rose 8% in the second quarter to $214.4 million, or $1.40 a share, far exceeding Wall Street expectations of $1.29 a share. The results exclude a one-time charge to beef up the company’s legal reserves in the wake of a $111-million jury verdict against the company. Bear Stearns’ results, the first reported by a securities firm since a plunge in technology stocks curbed underwriting and merger advisory work in the quarter, show how Bear’s brokerage and custody businesses offset volatility in banking. Revenue net of interest expense fell 2.6% to $1.32 billion. The 66-cents-per-share charge was more than the 45 cents analysts expected for the verdict in the case of a Canadian investor, Henryk de Kwiatkowski, who blamed the firm for his loss of $300 million on currency bets. After the charge, net income was $118.4 million. Bear Stearns shares rose $1.38 to $42.25 on the NYSE.