Lehman, which employs close to 9,000 people worldwide, earned $301 million, or $2.28 per diluted share, in the fourth quarter ended November 30. That was a fourfold increase from a net profit of $74 million, or 51 cents per share, in the year-ago quarter, when volatile debt markets slashed Lehman's trading profits.

``We are in the greatest bull market in the history of mankind,'' said analyst Steve Galbraith of Sanford Bernstein. ``If you're not making a lot of money now, you're never going to make it.''

Lehman's stock rose 3-1/2, or 5 per cent, to 73-1/2, in afternoon trading on the New York Stock Exchange. Financial shares rebounded somewhat from earlier losses this week caused by fears of higher US interest rates. Lehman's shares, which last year almost doubled to 84-11/16, had fallen 16.5 per cent this week.

Lehman's latest quarterly earnings per share marked a record and beat Wall Street expectations of $1.97 a share, according to market research firm First Call/Thomson Financial.

US investment banks Morgan Stanley Dean Witter & Co and Goldman Sachs Group Inc in December beat estimates by large margins, in part because they spent less on bonuses and tax bills than in previous quarters.

``Unlike Morgan Stanley and Goldman, Lehman's earnings were clean; compensation and tax ratios were identical with the full-year numbers,'' said analyst Ray Soifer of Brown Brothers Harriman. Lehman's net income failed to match its record profits in the second quarters of both 1998 and 1999. Lehman set aside a special $50 million dividend to be paid to former parent American Express Co in those periods, which cut earnings per share.