Bermuda-based W.P. Stewart & Co., Ltd. has seen its profits fall by 28 percent during the second quarter of 2003 due to a fall in revenues from fees, the company reported last week.

The asset management company reported net income of $10.7 million, or $0.24 per share (diluted) and $0.24 per share (basic), for the second quarter ended June 30, 2003. This compares with net income in the second quarter of the prior year of $14.8 million, or $0.32 per share (diluted) and $0.34 per share (basic).

The company said the net income for the quarter ended 30 June 2003 of $10.7 million had been adjusted for $1.8 million which represented the add-back of non-cash expenses of depreciation, amortisation and other non-cash charges on a tax-effected basis. This left cash earnings at $12.5 million, still down from the same quarter of the prior year, when cash earnings were $16.7 million.

Assets under management at quarter-end were approximately $8 billion, compared to approximately $7.3 billion at the end of the prior quarter, an increase of 9.6 percent and a decline of 3.6 percent from the $8.3 billion reported last year.

For the second quarter of 2003 there were 45,121,314 common shares outstanding on a weighted average diluted basis compared to 46,580,502 common shares outstanding for the second quarter of 2002 on the same weighted average diluted basis.

Performance in the W.P. Stewart & Co., Ltd. U.S. Equity Composite for the second quarter of 2003 was up 11.4 percent pre-fee and up 11.1 percent post-fee, the company said.

W.P. Stewart said its five-year performance record for the period ended 30 June 2003 averaged 1.0 percent pre-fee (-0.2 percent post-fee), compounded annually, compared to an average of -1.6 percent for the S&P 500 in the period.

"Currently, portfolio earnings growth remains solidly positive and the company's research analysts expect portfolio earnings growth to be within the historical range over the next few years," said the release.

Revenues were $30.1 million for the quarter ended 30 June 2003, down 17.3 percent from $36.4 million, for the same quarter of 2002.