Lehman Brothers Holdings Inc. reported net income of US$916 million for the third quarter ended August 31, up 4% from the third quarter of fiscal 2005.

Quarter over quarter, net income was down a bit. Second quarter fiscal 2006 net income was US$1 billion. For the first nine months of 2006, the firm reported record net income of US$3 billion, up 23% from the same period last year.

Net revenues (total revenues less interest expense) for the third quarter came in US$4.2 billion, up 8% from the third quarter of 2005, but down 5% from the second quarter of this year. Net revenues for the first nine months of 2006 are up 19%, to a record US$13.1 billion.

Investment Banking revenues decreased 11% to US$726 million in the third quarter, reflecting a decrease in completed M&A transactions and equity origination volumes. Capital Markets net revenues rose 13% to US$2.8 billion, compared to US$2.5 billion for the same period in fiscal 2005, representing the third highest quarter ever for the segment. Investment Management net revenues, which increased 18% to US$605 million in the third quarter compared to US$511 million a year ago, were attributable to record Private Investment Management revenues, which increased 7% to US$256 million, and higher Asset Management revenues. Asset Management reported its second highest revenues ever of US$349 million, an increase of 28% from US$272 million a year ago. Assets under management grew to a record US$207 billion.

Chairman and CEO Richard Fuld, Jr. said, “Market conditions during the third quarter were clearly more challenging than during the first half of the year. However, despite the market environment and the typically slower activity of the summer months, these results are our best third quarter results ever. These results also contributed to our best nine months ever, which were driven by record performances across all segments and regions. This performance demonstrates the firm’s ability to partner with our clients across cycles and to continue to deliver consistent returns to our shareholders.”