NEW YORK Bermuda-based asset manager WP Stewart & Co. said third-quarter profit shrank 71 percent as trading activity slowed dramatically, and the company earned less from management fees.

The company posted third-quarter net income of $3.5 million, or 8 cents per share, compared with profit of $12.2 million, or 27 cents per share, in the year-ago quarter.

Earnings before non-cash charges were $7.5 million, or 16 cents per share, compared with $14.9 million, or 32 cents per share, in the third quarter of 2005.

Analysts polled by Thomson Financial forecast earnings of 21 cents per share. Analysts usually exclude non-cash charges from their estimates.

Revenue fell 18 percent to $27.6 million from $33.7 million.

The company blamed the miss on an ?abnormally low? level of trading.

Trading activity was barely half the average quarterly transactions in the past five years, the company said, while trading in the third quarter of 2005 was abnormally high.

The company said portfolio trading returned to more typical levels in October.

Assets under management fell 13.5 percent to $8.3 billion while client billings fell 10.6 percent, leading to a $2.8 million decrease in fee revenue, or 5 cents per share. The company said competitive pressure, weak short-term portfolio performance and other factors led to outflows.

Shares of WP Stewart fell 38 cents, or 2.7 percent, to $13.62 in morning trading on the New York Stock Exchange.