Bermuda-based asset management company W.P. Stewart & Co., Ltd. yesterday reported a drop in income of just over $9 million last year.

Their net income was $17.5 million, or $0.37 per share (diluted) and $0.40 per share (basic), for the fourth quarter ended December 31, 2001. This compares with net income in the fourth quarter of the prior year of $26.6 million or $0.57 per share (diluted) and $0.63 per share (basic).

Cash earnings for the quarter ended December 31, 2001, net income adjusted to include non-cash expenses of depreciation and amortisation, on a tax-effected basis, were $19.4 million, or $0.42 per share (diluted), compared with $28.4 million, or $0.61 per share (diluted) in the same quarter of the prior year.

Assets under management at quarter-end were $9.2 billion, reflecting an increase of $1 billion from the end of the prior quarter, and a decline of $1.1 billion from December 31, 2000.

For the full year ended December 31, 2001, net income was down 19 percent to $80.3 million, or $1.71 per share (diluted) and $1.85 per share (basic), on revenues of $160.7 million. Net income in 2000 was $99.1 million, or $2.18 per share (diluted) and $2.37 (basic), on revenues of $203.3 million.

Cash earnings, net income adjusted to include non-cash expenses of depreciation and amortisation, on a tax-effected basis, for 2001 were $87.2 million, or $1.86 per share (diluted), versus $105.9 million, or $2.33 per share (diluted), in the same period of the prior year.

W.P. Stewart's five-year performance record for the period ended December 31, 2001 averaged 12.8 percent pre-fee (11.5 percent post-fee), compounded annually.

Assets under management (AUM) at year-end were $9.2 billion, compared with $8.2 billion at September 30, 2001, and $10.3 billion at the quarter ended December 31, 2000.

W.P. Stewart & Co., Ltd. said it concentrates its investments in large, generally less cyclical, growing businesses. Throughout most of the company's 27-year history, the growth in earning power behind clients' portfolios has ranged from approximately 11 percent to 22 percent annually.

The extraordinary combination of economic and political events in 2001 resulted in the growth in portfolio earning power in 2001 dropping below the historical range, the company said.

However, portfolio earnings growth remained solidly positive in 2001 and significantly outperformed that of the S&P Industrials, and the company's research analysts expect portfolio earnings growth to be within the historical range over the next five years.

The company will pay a dividend of $0.30 per common share on January 31, 2002 to shareholders of record as of January 18, 2002.