NEW YORK (Reuters) — Merrill Lynch & Co. Inc. said yesterday second-quarter net earnings surged 31 percent on strong performances in investment banking and trading of credit-related products amid a volatile market for components linked to subprime mortgages.Merrill Lynch's subprime mortgage-related activities, including collateralised debt obligations, did not sap overall results, a concern of some investors heading into the quarter. The company easily beat earnings and revenue estimates.

"The quarter showed that Merrill has navigated recent market problems quite well and that the issues of market concern are not a major driver of earnings," Deutsche Bank analyst Mike Mayo said in a research note. Mayo has a "buy" rating on Merrill Lynch's stock.

The world's largest brokerage said net earnings were $2.1 billion, or $2.24 a diluted share, compared with $1.6 billion, or $1.63, in the year-earlier period.

Analysts, on average, looked for Merrill Lynch to earn $2.02 a share, according to Reuters Estimates.

Net revenue in the quarter rose 19 percent to $9.7 billion from $8.2 billion in the year-earlier period. That easily topped the average revenue estimate of analysts who looked for $9.26 billion.

Revenue from investment banking soared 41 percent to $1.4 billion on debt offerings and fees from mergers and acquisitions. Cheap debt has fueled a global M&A frenzy as private equity funds and others snap up companies.