Bear Stearns Companies Inc. today reported earnings for the first quarter ended February 28, rose 8% from the first quarter of 2006.

Net income for the first quarter of 2007 was US$554 million, up 8% from US$514 million for the first quarter of 2006. Net revenues were US$2.5 billion for the 2007 first quarter, up 14% from US$2.2 billion in the 2006 first quarter. The annualized return on common stockholders’ equity was 18.3% for the first quarter of 2007 and 18.6% for the trailing 12-month period ended February 28, 2007.

“We are pleased with this excellent performance, revenues for the first quarter were up for every business segment,” said James Cayne, chairman and chief executive officer of The Bear Stearns
Companies Inc. “Growing the company remains a core focus as we continue to invest in our domestic and international franchises with successful results.”

Capital Markets net revenues for the first quarter were US$2 billion, up 15% from the first quarter of 2006. Within that segment, Institutional Equities net revenues were up 3% as equity derivatives delivered a record quarter with improved market conditions leading to increased customer activity.
International sales and trading revenues increased in the first quarter compared with the year-ago quarter, and risk arbitrage net revenues rose reflecting the high level of activity in announced merger and acquisition transactions.

Fixed Income net revenues were US$1.1 billion, up 27%. The firm noted that its credit business produced
record results led by the credit derivatives and distressed debt areas. The interest rate area also produced strong results reflecting increased volatility and higher customer volume. Residential mortgage-related revenues decreased from the prior year period, reflecting weakness in the U.S. residential mortgage-backed securities market.

Investment Banking net revenues were also up 3%. Equity underwriting and merger and acquisition activity remained strong in the first quarter of 2007, it noted. However, merchant banking revenues were lower than in the prior year quarter.

First quarter Global Clearing Services net revenues were US$276 million, up 5%, and Wealth Management net revenues for the first quarter of 2007 were US$255 million, an increase of 14%.