“Goldman Sachs Group Inc. and Lehman Brothers Holdings Inc. kicked off the securities industry’s second-quarter earnings season on diverging tracks,” reports Susanne Craig in this morning’s Wall Street Journal.

“Lehman’s second-quarter net income rose 14% to $430 million, or $1.38 a diluted share, from $378 million, or $1.39 a diluted share, in the year-earlier period, blowing through analyst estimates of $1.14 a share, according to Thomson Financial/First Call.

“The firm’s earnings for the three months ended May 31 were driven primarily by record fees from new bond issues and strong results generally in the fixed-income arena.

“Meanwhile, Goldman’s earnings suffered because of weakness in investment banking and stock-trading activity. Goldman said net dropped 24% to $577 million in the quarter ended May 25, or $1.06 a diluted share, from $755 million, or $1.48 a share, a year earlier.

“In New York Stock Exchange composite trading at 4 p.m. Tuesday, Lehman’s stock rose $5.20 to $72.50. Goldman shares closed down 47 cents to $88.18.

“Goldman Chief Financial Officer David Viniar said he remains “quite cautious” about the firm’s short-term outlook, saying the investment-banking business has picked up only slightly so far this quarter.

“Goldman’s net revenue in the quarter was $3.99 billion, down 3.6% from $4.15 billion a year earlier. Revenue from investment-banking activity was down 50% to $792 million, cushioned by a 50% increase in revenue to $948 million from its bond, commodity and currency businesses.

“So far this year, Goldman has cut its compensation payout to 49% of net revenue, down from 50% a year earlier. Goldman’s earnings were in line with estimates of analysts polled by Thomson Financial.

“Lehman’s net revenue rose 15% to $2.02 billion from $1.76 billion in the year-earlier quarter. Revenue from capital-markets activity, propelled by a 77% increase to $633 million in the firm’s bond businesses, rose 18% in the quarter to $1.27 billion. Investment-banking revenue rose 17% to $551million.