W.P. Stewart & Co., Ltd. Reports Net Income For First Quarter 2006 of $ 12.7 Million

W.P. Stewart & Co., Ltd. Reports Net Income For First Quarter 2006 of $ 12.7 Million

April 27, 2006

Diluted Earnings Per Share of $0.28 for the First Quarter

    HAMILTON, Bermuda, April 27 /Xinhua-PRNewswire/ -- W.P.
Stewart & Co., Ltd. today reported net income of $12.7
million, or $0.28 per share (diluted) and $0.28 per share
(basic), for the first quarter ended 31 March 2006.  This
compares with net income in the first quarter of the prior
year of $12.8 million or $0.28 per share (diluted) and
$0.28 per share (basic).

    Net income for the quarter ended 31 March 2006 of $12.7
million, adjusted for the add-back of $1.8 million,
representing non-cash expenses of depreciation,
amortization and other non-cash charges on a tax-effected
basis ("cash earnings"), was $14.5 million, or
$0.32 per share (diluted).  In the same quarter of the
prior year, cash earnings were $15.3 million (net income of
$12.8 million adjusted for the add-back of $2.5 million
representing non-cash expenses of depreciation,
amortization and other non-cash charges on a tax-effected
basis), or $0.33 per share (diluted).

    For the first quarter of 2006 there were 45,941,269
common shares outstanding on a weighted average diluted
basis compared to 45,861,264 common shares outstanding for
the first quarter of 2005 on the same weighted average
diluted basis.

    Performance

    Performance in the W.P. Stewart & Co., Ltd. U.S.
Equity Composite (the "Composite") for the first
quarter of 2006 was +1.5% pre-fee and +1.2% post-fee. This
compares with +4.2% for the S&P 500.

    For the twelve month period ending 31 March 2006,
performance in the Composite was +14%, pre-fee and +12.8%,
post-fee. This compares with +11.7% for the S&P 500.

    In each of the one, three, five and ten-year periods
ended 31 March 2006, performance of the W.P. Stewart U.S.
Equity Composite has exceeded the performance of the
S&P 500 on a pre-fee basis and for the one, five and
ten year periods on a post-fee basis. 

    Assets Under Management

    Assets under management (AUM) at quarter-end were
approximately $9.4 billion, compared with approximately
$9.5 billion at 31 December 2005, and approximately $8.9
billion at 31 March 2005.

    Total net flows of AUM for the quarter ended 31 March
2006 were approximately -$237 million, compared with total
net flows of approximately -$232 million and approximately
-$43 million in the fourth quarter and in the first quarter
of 2005, respectively.

    In the quarter, net cash flows of existing accounts
were approximately -$31 million, compared with
approximately +$17 million and approximately +$31 million
in the fourth quarter and in the first quarter of 2005,
respectively.

    Net new flows (net contributions to our
publicly-available funds and flows from new accounts minus
closed accounts) were approximately -$206 million for the
quarter compared to approximately -$249 million and
approximately -$74 million in the fourth quarter and in the
first quarter of 2005, respectively.

    Look-Through Earning Power

    W.P. Stewart & Co., Ltd. concentrates its
investments in large, generally less cyclical, growing
businesses. Throughout most of the Company's 30-year
history, the growth in earning power behind clients'
portfolios, as measured by earnings per share, has ranged
from approximately 10% to 20%, annually.

    Currently the "look-through" earnings power
behind our clients' portfolios remains solidly positive
with portfolio earnings per share growth on a trailing four
quarter basis having advanced at the high end of the
historical range. The Company's research analysts expect
"look-through" portfolio earnings growth to be
within the 12-15% range over the next few years.

    Revenues and Profitability

    Revenues were $36.2 million for the quarter ended 31
March 2006, compared to $34.8 million for the same quarter
2005.

    The average gross management fee was 1.14%, annualized,
for the quarter ended 31 March 2006, compared to 1.17%,
annualized, for the same quarter of the prior year.
Excluding performance fee based accounts, the average gross
management fee was 1.27% for the quarter ended 31 March
2006, compared to 1.28%, annualized, for the same quarter
of the prior year.

    Total operating expenses increased approximately
$600,000 to $21.2 million, for the first quarter 2006, from
$20.6 million in the same quarter of the prior year.  

    During 2004, 2005 and through the first quarter of
2006, the Company issued restricted shares to various
employees. The non-cash compensation expense related to
these restricted share grants for the first quarter of
2006, which is included in "employee compensation and
benefits", was approximately $280,000 after adjusting
for a reversal of approximately $500,000 related to the
forfeiture of previously issued restricted shares. We
expect non-cash compensation expense related to these
restricted share grants to be at least $6.7 million for
2006. 

    Pre-tax income of $15.0 million was 41.4% of gross
revenues for the quarter ended 31 March 2006 compared to
$14.2 million or 40.9% of gross revenues in the comparable
quarter of the prior year.

    The Company's provision for taxes for the quarter ended
31 March 2006 was $2.3 million versus $1.4 million in the
comparable quarter of the prior year.  The tax rate was
15.6% of income before taxes for the quarter ended 31 March
2006 compared to 10% in the quarter ended 31 March 2005. The
increase in our tax rate relates to changes in the
allocation of our portfolio management activities among
various jurisdictions reflecting recent portfolio manager
departures and other management changes. The proportion of
our various activities based in high-tax jurisdictions has
increased somewhat relative to the activity based in
lower-tax jurisdictions. We are currently taking steps to
restore our historical geographical mix.

    Other Events

    The Company paid a dividend of $0.30 per common share
on 27 January 2006 to shareholders of record as of 13
January 2006, and will pay a dividend of $0.30 per common
share on 28 April 2006 to shareholders of record as of 13
April 2006.

    Conference Call

    In conjunction with this first quarter 2006 earnings
release, W.P. Stewart & Co., Ltd. will host a
conference call on Thursday, 27 April 2006.  The conference
call will commence promptly at 9:15am (EDT). Those who are
interested in participating in the teleconference should
dial 1-800-370-0898 (within the United States) or
[phone] (outside the United States).  The conference
ID is "W.P. Stewart". To listen to the live
broadcast of the conference over the Internet, simply visit
our website at www.wpstewart.com and click on the Investor
Relations tab for a link to the webcast.

    The teleconference will be available for replay from
Thursday, 27 April 2006 at 12:00 noon (EDT) through Friday,
28 April 2006 at 5:00 p.m. (EDT). To access the replay,
please dial 1-877-519-4471 (within the United States) or
[phone] (outside the United States). The PIN number
for accessing this replay is 7280245.

    You will be able to access a replay of the Internet
broadcast through Thursday, 4 May 2006, on the Company's
website at http://www.wpstewart.com. The Company will
respond to questions submitted by e-mail, following the
conference.

    W.P. Stewart & Co., Ltd. is an asset management
company that has provided research-intensive equity
management services to clients throughout the world since
1975. The Company is headquartered in Hamilton, Bermuda and
has additional operations or affiliates in the United
States, Europe and Asia.

    The Company's shares are listed for trading on the New
York Stock Exchange (NYSE: WPL) and on the Bermuda Stock
Exchange (BSX: WPS).

    For more information, please visit the Company's
website at http://www.wpstewart.com, or call W.P. Stewart
Investor Relations (Fred M. Ryan) at 1-888-695-4092
(toll-free within the United States) or + 441-295-8585
(outside the United States) or e-mail to
[e-mail].

    Statements made in this release concerning our
assumptions, expectations, beliefs, intentions, plans or
strategies are forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of
1995. Such statements involve risks and uncertainties that
may cause actual results to differ from those expressed or
implied in these statements. Such risks and uncertainties
include, without limitation, the adverse effect from a
decline or volatility in the securities markets, a general
downturn in the economy, the effects of economic, financial
or political events, a loss of client accounts, inability of
the Company to attract or retain qualified personnel, a
challenge to our U.S. tax status, competition from other
companies, changes in government policy or regulation, a
decline in the Company's products' performance, inability
of the Company to implement its operating strategy,
inability of the Company to manage unforeseen costs and
other effects related to legal proceedings or
investigations of governmental and self-regulatory
organizations, industry capacity and trends, changes in
demand for the Company's services, changes in the Company's
business strategy or development plans and contingent
liabilities. The information in this release is as of the
date of this release, and will not be updated as a result
of new information or future events or developments.

    
     W.P. Stewart & Co., Ltd.
     Unaudited Condensed Consolidated Statements of
Operations
    
                                             For the Three
Months Ended
                                 Mar. 31, 2006  Dec. 31,
2005  Mar. 31, 2005
    
      Revenue:
        Fees                       $27,187,308   
$34,339,458    $27,235,901
        Commissions                  8,260,794    
10,087,334      7,189,398
        Interest and other             798,077     
1,035,520        408,497

                                    36,246,179    
45,462,312     34,833,796
    
      Expenses:
        Employee compensation and      
         benefits                    7,738,837    
12,575,819      7,227,596
        Fees paid out                2,174,908     
2,973,947      1,887,350
        Commissions, clearance and     
         trading                     1,642,079     
2,103,729      1,486,802
        Research and 
         administration              3,629,544     
3,517,898      3,736,034
        Marketing                    1,711,094     
1,600,230      1,539,959
        Depreciation and 
         amortization                1,575,794     
2,051,310      2,043,389
        Impairment of intangible 
         asset                               -    
12,452,978              -
        Other operating              2,762,137     
2,545,850      2,678,969
                                    21,234,393    
39,821,761     20,600,099
    
      Income before taxes           15,011,786     
5,640,551     14,233,697
    
      Provision for taxes            2,347,675     
2,868,987      1,423,370
      
      Net income                   $12,664,111    
$2,771,564    $12,810,327
    
      Earnings per share:
    
      Basic earnings per share           $0.28         
$0.06          $0.28
    
      Diluted earnings per share         $0.28         
$0.06          $0.28
 

    
     W.P. Stewart & Co., Ltd.
     Unaudited Condensed Consolidated Statements of
Operations
    
                                                     %
Change From
                                            Dec. 31, 2005  
  Mar. 31, 2005
    
      Revenue:
        Fees                                      -20.83%  
         -0.18%
        Commissions                               -18.11%  
         14.90%
        Interest and other                        -22.93%  
         95.37%
    
                                                  -20.27%  
          4.05%
    
      Expenses:
        Employee compensation and benefits        -38.46%  
          7.07%
        Fees paid out                             -26.87%  
         15.24%
        Commissions, clearance and trading        -21.94%  
         10.44%
        Research and administration                 3.17%  
         -2.85%
        Marketing                                   6.93%  
         11.11%
        Depreciation and amortization             -23.18%  
        -22.88%
        Impairment of intangible asset           -100.00%  
          0.00%
        Other operating                             8.50%  
          3.10%
                                                  -46.68%  
          3.08%
    
      Income before taxes                         166.14%  
          5.47%
    
      Provision for taxes                         -18.17%  
         64.94%
    
      Net income                                  356.93%  
         -1.14%
    
      Earnings per share:
    
      Basic earnings per share                    366.67%  
          0.00%
    
      Diluted earnings per share                  366.67%  
          0.00%



        W.P. Stewart & Co., Ltd.
        Net Flows of Assets Under Management*
                                                    (in
millions)
    
                                                For the
Three Months Ended
                                              Mar. 31,   
Dec. 31,   Mar. 31,  
                                                2006       
2005       2005
    
        Existing Accounts:
          Contributions                         $329       
$260       $312
          Withdrawals                           (360)      
(243)      (281)
        Net Flows of Existing Accounts           (31)      
  17         31
        Publicly Available Funds:
          Contributions                           34       
  85         54
          Withdrawals                            (69)      
 (38)       (75)
        Direct Accounts Opened                    57       
 114         71
        Direct Accounts Closed                  (228)      
(410)      (124)
        Net New Flows                           (206)      
(249)       (74)
    
        Net Flows of Assets Under        
         Management                            $(237)     
$(232)      $(43)
    
     * The table above sets forth the total net flows of
assets under 
       management for the three months ended March 31,
2006, December 31, 2005 
       and March 31, 2005, respectively, which include
changes in net flows of 
       existing accounts and net new flows (net
contributions to our publicly 
       available funds and flows from new accounts minus
closed accounts). The 
       table excludes total capital appreciation or
depreciation in assets 
       under management with the exception of the amount
attributable to 
       withdrawals and closed accounts.


    For more information, please contact:

     Fred M. Ryan
     W.P. Stewart & Co., Ltd.
     Tel:   [phone]

SOURCE  W.P. Stewart & Co., Ltd.