NEW YORK (Bloomberg) ? Lazard Ltd., the investment bank led by Bruce Wasserstein, reported profit that missed analysts? estimates because of a decline in fees for takeover advice. The stock slid as much as three percent, the biggest drop since the firm?s initial public offering 18 months ago.

Third-quarter profit tumbled 32 percent to $35 million, or 34 cents a share, from $51.7 million, or 52 cents, a year earlier, New York-based Lazard said yesterday. The results fell short of the lowest estimate of six analysts polled by Bloomberg News, which ranged from 45 cents to 48 cents.

Lazard completed transactions worth $50.2 billion in the quarter, less than half the amount of a year earlier, according to data compiled by Bloomberg. The 158-year-old firm slipped to 12th among advisers on takeovers announced this year from ninth in the last two years. Revenue fell 17 percent to $297.5 million in the third quarter.

?Lazard?s revenues can be lumpy; this was the first quarter where the lumps were on the low end,? Susan Roth Katzke, an analyst at Credit Suisse Group in New York who rates the stock ?outperform,? wrote in a note to investors. She lowered her full-year earnings per share estimate to $2.10 from a range of $2.25 to $2.30.

The stock fell $1.95, or 4.6 percent, to $40.45 in New York Stock Exchange composite trading at 9:48 a.m. Earlier yesterday the shares fell as low as $39. Lazard?s earnings exceeded the average estimate of analysts polled by Thomson Financial in the previous four consecutive quarters.

Third-quarter revenue from financial advisory, which includes fees for takeover and debt restructuring advice, declined 27 percent to $187.1 million from $257.9 million a year earlier. Asset-management revenue increased 15 percent to $124.9 million from $108.3 million last year.

?The timetable, size and number of our M&A assignments will cause fluctuations in our quarterly results,? Lazard vice chairman Steven Golub said in an interview. ?That?s part of what?s happened in this quarter,? he said, adding that the number of deals Lazard is handling ?has continued to build?.

The firm advised Resolution Plc during the quarter on its ?3.6 billion ($6.9 billion) purchase of UK life-insurance units from Santander Central Hispano SA?s Abbey National. It also helped arrange International Paper Co.?s $1.4 billion sale of a unit to an affiliate of Apollo Management LP.

?It would be a mistake to extrapolate this quarter?s trend to future periods, at least for the near-to-intermediate term,? Michael Hecht, an analyst at Bank of America Corp. in New York who rates the shares ?buy,? wrote in a note to investors.

The firm?s financial advisory revenue rose 7 percent in the first nine months of the year to $671.3 million. In the same period, Merrill Lynch & Co.?s revenue from advisory services rose 53 percent to $813 million.

Lazard?s revenue ?increased substantially more? than competitors last year, Golub said. The firm?s financial advisory revenue rose 32 percent in 2005, compared with a 30 percent jump at Merrill Lynch.

Lazard?s position among advisers on US takeover deals, where it ranks ninth, is higher than in Europe, where it?s 12th, according to Bloomberg data.

?We are confident in our outlook and continue to invest in our business, especially in Europe, to better position the firm in areas where we see opportunities for significant growth,? Wasserstein, who last year predicted an M&A boom that might last as long as seven years, said in the statement.

Marcus Agius, the chairman of Lazard?s London unit and a 34-year veteran of the firm, will leave at the end of the year to become chairman of Barclays Plc, the U.K.?s third-biggest bank by market value, Barclays said in August.

Last month Lazard promoted Georges Ralli to be the sole head of the firm in Europe, with William Rucker as his deputy chief executive.