On the same day that a couple of its divisions settled a US$250 million late trading/market timing case with U.S. regulators, Bear Stearns Companies Inc. reported record earnings.

The firm reported record earnings per share (diluted) of US$3.54 for the first quarter ended February 28, up 34% from the first quarter of 2005. Net income for the first quarter of 2006 was a record US$514 million, up 36% from the first quarter of 2005.

Net revenues were a record US$2.2 billion for the 2006 first quarter, up 19% from US$1.8 billion in the 2005 first quarter. The annualized return on common stockholders’ equity was 20.1% for the first quarter of 2006 and 17.1% for the trailing 12-month period ended February 28, 2006.

“I am extremely pleased to report our second consecutive quarter of record net revenues, record net income and record earnings per share,” said James Cayne, chairman and chief executive officer of the Bear Stearns Companies Inc. “These results were driven by strong contributions from all of our businesses, and in particular we saw record revenues in the institutional equities, fixed income and wealth management areas. We are proud of this quarter’s outstanding results and look forward to the rest of 2006.”

The firm’s capital markets division reported record net revenues for the first quarter of US$1.7 billion, up 20% from the first quarter ended February 28, 2005. Institutional equities net revenues were up 56%, and fixed income net revenues gained just 3% from the year-ago quarter.

Investment banking net revenues were up 36%. “Significantly higher U.S.-completed M&A volumes led to higher advisory, merger and acquisition-related revenues,” the firm noted. “Merchant banking related revenues also increased compared with the year-ago-period reflecting higher performance fees on merchant banking fund investments and increased principal gains.”

Wealth management net revenues for the first quarter of 2006 were a record US$223 million, an increase of 32% from US$169 million in the first quarter of 2005. Net revenue growth was largely due to increases in performance and management fees. Revenues for Private client services increased by 13%, but asset management revenues jumped 71% to a record US$94 million.