NEW YORK (Reuters) - Investment bank Lazard Ltd said fourth-quarter profit dropped by half, but results beat expectations as restructuring revenue rose, and its shares surged nearly 14 percent.

In recent quarters, posting any profit at all has been unusual for investment banks, which have racked up billions of dollars of losses from bad assets since 2007.

Lazard benefits from its focus on merger advisory and restructuring rather than stock and bond trading. It is advising on some of the largest bankruptcies, including those of Lehman Brothers Holdings Inc and Tribune Co.

Restructuring operating revenue in the quarter rose to $47.1 million from $32.3 million in the year-ago quarter, Lazard said.

"That's going to be a very important theme and growth driver over certainly '09, I think, well into '10 if not longer," Keefe, Bruyette & Woods analyst Lauren Smith said in an interview.

Net income fell to $61.2 million, or 50 cents a share, from $122.6 million, or $1.04 a share, in the same quarter the prior year, the bank said yesterday.

Analysts on average expected earnings of 43 cents a share, according to Reuters Estimates.

Lazard's results included a gain of about 10 to 11 cents a share as the bank retired some debt, Smith estimated. The investment bank is planning to hire professionals in areas like merger advisory for financial institutions, but is reducing staff in other areas, including trade processing.

Lazard said it expects to record a pretax charge of $60 million in the first quarter related to the staff reductions.

The economic environment remains difficult, chief executive Bruce Wasserstein said in a statement. "Global economic challenges may persist for some time," he said.

Financial advisory operating revenue fell to $252.4 million in the fourth quarter from $393.1 million a ear earlier. Merger and acquisition and strategic advisory operating revenue fell to $192.7 million from $313.6 million.

Asset management operating revenue dropped to $125.4 million from $231.2 million.