UPDATE 2-Lazard profit doubles as global M&A volumes soar

Thu May 1, 2014 3:29pm EDT

* First-quarter adjusted EPS $0.61 vs est $0.54

* Total revenue up 30 pct

* M&A and other advisory fees double (Updates share price, adds Breakingviews link)

May 1 (Reuters) - Investment bank and asset manager Lazard Ltd more than doubled its adjusted quarterly profit as its merger advisory revenue soared in a thriving M&A market.

Lazard's financial advisory revenue soared 64 percent to $275.5 million in the first quarter ended March 31, driven by a doubling of M&A and other advisory fees.

Worldwide deal making has totaled $1.1 trillion so far this year, according to Thomson Reuters data, helped by a flurry of deals in the healthcare and media sectors. This is just the third time that M&A volume has crossed the $1 trillion dollar in the same period since 1980.

Lazard advised Shire Plc on its $4.2 billion buy of ViroPharma Inc and Google Inc on its $3.2 billion acquisition of Nest Labs, among others in the first quarter.

"Financial Advisory activity increased as our public, private and sovereign clients sought trusted advice on complex assignments," Lazard Chief Executive Kenneth Jacobs said in a statement on Thursday.

Lazard's profit rose to $81.3 million, or 61 cents per share, on an adjusted basis in the three months ended March 31, from $37.2 million, or 28 cents per share, a year earlier.

Analysts on average had expected earnings of 54 cents per share, according to Thomson Reuters I/B/E/S.

Total revenue grew 30 percent to $549.4 million, above the average analysts estimate of $514.8 million.

Lazard has been diversifying its business to rely less on merger advisory revenue, which tends to be volatile, by expanding its asset-management unit.

That business did well last quarter as a rise in stock prices boosted fees. Asset-management revenue rose 9 percent to $262.3 million.

Average assets under management rose to $186 billion in the first-quarter from $171 billion.

Lazard said fourth-quarter compensation costs fell to 58.8 percent of operating revenue in the quarter from 60 percent last year - within its goal of a "mid-to-high" 50 percent range.

Lazard shares rose 5 percent to $49.43 on the New York Stock Exchange. The stock has risen 3 percent since it reported fourth-quarter results in February. (Reporting by Tanya Agrawal in Bangalore; Editing by Joyjeet Das)

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