UPDATE 4-Lazard posts quarterly loss, beats forecasts

+ Q1 EPS excluding items $0.46 vs $0.38 estimate

+ Total revenue of $459 mln vs. $276 mln a year earlier

+ Shares up 2.3 percent

(Adds details; Updates stock price)

By Joe Rauch

CHARLOTTE, N.C. (Reuters) - Lazard Ltd posted a narrower quarterly loss and beat analyst forecasts on an operating basis, helped by advisory and asset management fees.

The better-than-expected revenue jumps in its deal advisory and asset management units come as global deal and investment markets begin to recover after the 2008 financial crisis.

Shares were up 2.3 percent in midday trading.

"Our first quarter results ... show continued strength and momentum in both our financial advisory and asset management businesses as we enter the gradual upturn of the next cycle," said Chief Executive Kenneth Jacobs.

The New York-based investment bank reported a net loss of $33.5 million, or 38 cents per share, compared with a year-earlier loss of $53.5 million, or 77 cents per share.

Excluding about $100 million in one-time charges, the bank earned 46 cents a share, compared with the average analyst forecast of 38 cents per share, according to Thomson Reuters I/B/E/S.

Lazard reported a first-quarter net operating income of $77 million, excluding the charges. Revenue increased 66 percent to $459 million from $276 million a year ago.

KRAFT, PRUDENTIAL DEALS

The New York-based investment bank reported $269 million in operating revenue from its financial advisory division, which oversees Lazard's M&A, restructuring and capital markets units, a 65 percent increase over a year ago.

Lazard advised on deals during first quarter such as Kraft Foods' $21 billion buyout of Cadbury, ING's sale of its three U.S. retail broker-dealers to Lightyear capital and Lincoln Financial's $452 million sale of Delaware Investments to Macquarie.

Others that have not closed include Prudential PLC's $35.5 billion buyout of AIA Group, Qwest's $22.4 billion merger with CenturyLink and Coca-Cola Enterprises' $14.4 billion sale of its North American operations to The Coca-Cola Co.

The asset management division contributed a smaller portion of revenues than the M&A division, totaling $183 million.

The largest contributor to the company's operating results was a surge in fees as Lazard's assets under management grew 66 percent to $135 billion.

Asset management fees totaled $161 million in the quarter, a 73 percent increase. M&A and strategic advisory revenues totaled $148 million and increased 53 percent.

The revenue gains overshadowed a series of previously announced charges taken during the quarter.

Lazard recorded $111 million in charges that pushed the operating profit into a quarterly loss.

They included $87 million in one-time personnel expenses as part of ongoing job cuts.

HIGH-PROFILE HIRES

Lazard is making some key hires for prominent positions, and is hiring some senior bankers and asset managers.

In March, Lazard Italy hired Carlo Salvatori as chairman, and Lazard Asset Management hired Keichi Miki as head of its Japanese operations. In January, Lazard rehired Felix Rohatyn after he served as U.S. ambassador to France and ran a consulting firm.

In the wake of the financial crisis, Lazard has tried to control expenses while increasing revenue in an effort to return to pre-crisis profit levels.

Lazard's compensation ratio -- a key measure used by investment banks because that is their largest expense -- declined to 60.3 percent after excluding the one-time charges. in first quarter, down from 74.6 percent last year.

A push to rein in expenses appears to be working, analysts said.

"They still have work to do, but its shows they're finally starting to address it," said Doug Sipkin, an analyst with Ticonderoga Securities.

Lazard shares were up 88 cents at $39.09 on the New York Stock Exchange. (Reporting by Joe Rauch, editing by Gerald E. McCormick, Derek Caney and Robert MacMillan)

REUTERS