Morgan Stanley Dean Witter & Co. reported a 55% rise in third-quarter net income, to $970 million, led by investment banking and rebounds in asset management and trading revenue.

Earnings per share for the three months that ended Aug. 31 were $1.65, beating the consensus estimate by 4 cents.

"Given the kind of environment we're in, with a great deal of uncertainty" about financial markets, Morgan Stanley "did quite well," said Guy Moszkowski, an analyst at Salomon Smith Barney Inc. "They reported 26% return on equity, and that's quite profitable."

In the year-earlier period its return on equity was 18.9%.

Morgan Stanley, the nation's second-largest securities firm after Merrill Lynch & Co., gave credit to several units, including the credit card business, mutual funds, and on-line brokerage.

Profits in the securities unit, which consists of investment banking, trading, and brokerage, rose 43%, to $633 million. The results included record earnings from investment banking and commodities trading, Morgan Stanley said.

The company advised on $288 billion of mergers announced in the third quarter, ranking it No. 1in the world, according to Thomson Financial's Securities Data Co. That is an increase of 11% from $259.6 billion a year earlier. Revenue from investment banking rose 47%, to $1.21 billion.

Revenue from commodities trading set a record thanks to rising energy prices, the company said.

Trading revenue overall more than doubled, to $1.2 billion, from $499 million. But that was down 39% from the record-setting second quarter, in part because of rising interest rates.

"The bond trading environment was quite weak -- weaker than many analysts had forecast," Mr. Moszkowski said. The yield on 30-year Treasury bonds rose to 6.06% at Aug. 31, from 5.92% June 1.

On the asset management side, Morgan Stanley earned $135 million, compared with a break-even quarter a year earlier. Last year's results were hurt by a plunge in global stock and bond markets after Russia defaulted on its bonds. This year's profits benefited from continued growth in assets under management -- to $415 billion at the end of the quarter, up 18%.

Morgan Stanley should sustain its momentum in the fourth quarter, Mr. Moszkowski said. He forecast per-share earnings of $2 for the period.

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