Feb. 4 (Bloomberg) -- Lazard Ltd., the investment bank led by Bruce Wasserstein, rose 10 percent in New York trading after reporting profit that beat analysts’ estimates and higher revenue from advising bankrupt companies.

Fourth-quarter net income dropped 36 percent to $38 million, the New York-based company said today in a statement. Per-share profit of 50 cents beat the average estimate in a Bloomberg survey of analysts by 5 cents.

Lazard, one of the last remaining investment banks on Wall Street, was hurt by a slowdown in mergers and acquisitions that also eroded revenue at larger competitors such as New York-based Morgan Stanley. Revenue from advising bankrupt or near-bankrupt companies, including Lehman Brothers Holdings Inc. and Nortel Networks Corp., rose 46 percent to $47.1 million.

“We are encouraged by the solid restructuring result,” Bank of America Corp. analyst Guy Moszkowski wrote in a note today. “Conversations appear to be accelerating as the global economy rapidly deteriorates, and Lazard is solidly positioned as a global adviser of choice.”

Lazard, which dropped 12 percent this year before today on the New York Stock Exchange, rose $2.62 to $28.72 in composite trading at 4:20 p.m., after reaching $29.95 earlier today.

The firm said it is cutting staff to 2006 levels, or about 10 percent below its peak. Lazard will take a pretax charge of approximately $60 million in the first quarter related to the job cuts, which have brought head count to about 2,200.

‘Tumultuous Year’

“This environment is a time of opportunity for Lazard, although this has been a tumultuous year for investment banking,” Wasserstein, 61, said in the statement. “Global economic challenges may persist for some time.”

Fourth-quarter operating revenue from takeover advisory services fell 36 percent to $252.4 million as fees from takeover advice declined 39 percent to $192.7 million.

Lazard advised companies on 15 completed deals in the quarter, including InBev NV’s $52 billion purchase of Anheuser- Busch Cos. and Mitsubishi UFJ Financial Group Inc.’s $9 billion investment in Morgan Stanley.

Lazard is “continuing to see a dramatic increase in the level of restructuring and capital structure advisory activity,” Vice Chairman Steven Golub said in an interview. “We expect that to continue this year.”

Lazard is advising on more than 70 restructuring assignments in North America and Europe, Golub said.

Asset Management

Revenue from asset management decreased 46 percent in the quarter to $125.4 million. Assets under management fell 36 percent to $91.1 billion. There were $2.2 billion of net outflows during the quarter.

Larger rivals Goldman Sachs Group Inc. and Morgan Stanley transformed themselves into bank holding companies to gain access to more customer deposits and federal bailout money. The two New York-based companies, once the biggest securities firms in the world, turned to the government for help after Lehman collapsed in September and Merrill Lynch & Co. decided to sell itself to Bank of America.

Wasserstein, a former corporate lawyer, rose to the top ranks of merger advisers during the 1980s, helping run investment banking at First Boston Corp., now part of Credit Suisse Group AG. In 1988, he left with Joseph Perella to found Wasserstein, Perella & Co., an advisory firm that he sold to Germany’s Dresdner Bank AG for $1.56 billion in January 2001.

Michel David-Weill, a descendant of Lazard’s founding family, hired Wasserstein in 2001 to revive the company. Wasserstein recruited more bankers and, over David-Weill’s objections, sold shares in the firm to the public for the first time in May 2005 for $25 each.

To contact the reporters on this story: Josh Fineman in New York at jfineman@bloomberg.net.

Last Updated: February 4, 2009 16:22 EST