Merrill Lynch reported record net revenues, net earnings and earnings per diluted share for 2006, driven by strong growth in the firm’s business segments.

Net earnings for 2006 were US$7.5 billion, as total net revenues increased strongly to US$34.7 billion. Pre-tax earnings increased to a record US$10.4 billion, the pre-tax profit margin rose to a record 30.1%, and the return on average common equity increased to 21.3%, the firm said.

Merrill Lynch’s 2006 results included the one-time net gain arising from the closing of the merger between Merrill Lynch Investment Managers and BlackRock during the third quarter, which was essentially offset by the one-time non-cash compensation costs recorded in the first quarter.

These one-time items, in aggregate, increased both full year net revenues and non-interest expenses by approximately US$2.0 billion, resulting in a slightly negative net impact to 2006 net earnings of US$72 million. Adjusted to exclude the impact of those one-time items, full year 2006 net earnings were US$7.6 billion, up 48% from 2005.

Fourth quarter 2006 net earnings were US$2.3 billion, up 71% from the year-ago quarter but down 24% from the third quarter of 2006, which included the one-time net gain from closing the BlackRock transaction.

“We are extremely pleased with Merrill Lynch’s performance for the year and the fourth quarter,” said Stan O’Neal, chairman and chief executive officer. “By virtually any measure, our company completed the most successful year in its history.”

“Revenues, earnings, earnings per share and return on equity all grew strongly as a result of our continued emphasis on broadening the asset classes and capabilities we can offer clients, expanding our geographic footprint, diversifying our business mix, managing and deploying our capital more effectively, and investing in top talent,” O’Neal added. “We finished the year positioned better than ever to capitalize on the array of opportunities still emerging around the world as a result of what we believe are fundamental and long-term changes in how the global economy and capital markets are developing.”