W. P. Stewart & Co., Ltd. Reports Net Income For Second Quarter And First Six Months Of 2004

Second Quarter 2004 Highlights

For the second quarter of 2004 there were 45,463,443 common shares outstanding on a weighted average diluted basis compared to 45,121,314 common shares outstanding for the second quarter of 2003 on the same weighted average diluted basis.

Cash earnings for the quarter ended 30 June 2004 were $15.7 million (net income of $13.8 million adjusted to include $1.9 million representing non-cash expenses of depreciation, amortization and other non-cash charges on a tax effected basis), or $0.34 per share (diluted). In the same quarter of the prior year, cash earnings were $12.5 million (net income of $10.7 million adjusted for the inclusion of $1.8 million representing non-cash expenses of depreciation, amortization and other non-cash charges on a tax-effected basis), or $0.28 per share (diluted).

Assets under management at quarter-end were more than $8.6 billion, compared to more than $8.5 billion at the end of the prior quarter, an increase of 1.2% and an increase of 7.5% from the $8.0 billion reported at 30 June 2003.

Six Month Results

For the six months ended 30 June 2004, net income was up 32.4%, compared to the first six months of 2003, to $27.7 million, or $0.61 per share (diluted) and $0.62 per share (basic), on revenues of $69.8 million. Net income for the six months ended 30 June 2003 was $20.9 million, or $0.46 per share (diluted) and $0.47 per share (basic), on revenues of $59.8 million.

Cash earnings for the six months ended 30 June 2004 were $31.5 million (net income of $27.7 million adjusted to include $3.8 million, representing non-cash expenses of depreciation, amortization and other non-cash charges on a tax-effected basis), or $0.69 per share (diluted). In the same period of the prior year, cash earnings were $24.6 million (net income of $20.9 million adjusted for the inclusion of $3.7 million representing non-cash expenses of depreciation, amortization and other non-cash charges on a tax-effected basis), or $0.55 per share (diluted).

For the six months ended 30 June 2004, there were 45,442,807 common shares outstanding on a weighted average diluted basis compared to 45,031,233 common shares outstanding for the same period in 2003 on the same weighted average diluted basis.

Performance

Performance in the W.P. Stewart & Co., Ltd. U.S. Equity Composite (the "Composite") for the second quarter of 2004 was +2.4% pre-fee and +2.1% post-fee. For the six months ended 30 June 2004, performance in the Composite was +4.5% pre-fee and +3.9% post-fee. For the twelve month period ending 30 June 2004, performance in the Composite was +15.6%, pre-fee and +14.4% post-fee.

W.P. Stewart's five-year performance record for the period ended 30 June 2004 averaged +1.0% pre-fee (-0.1% post-fee), compounded annually, compared to an average of -2.2% for the S&P 500 in the five-year period.

In each of the three, five and ten-year periods, ended 30 June 2004, performance of the Composite has exceeded the performance of the S&P 500.

Assets Under Management

Assets under management (AUM) at quarter-end were more than $8.6 billion, compared with more than $8.5 billion for the quarter ended 31 March 2004, and approximately $8.0 billion reported at the quarter ended 30 June 2003.

Total net flows of AUM for the quarter ended 30 June 2004 were -$66 million, compared with -$76 million in the comparable quarter of 2003 and -$139 million in the first quarter of 2004.

Total net flows of AUM for the six months ended 30 June 2004 and 2003 were -$205 million and -$165 million, respectively.

In the second quarter of 2004, net cash flows to existing accounts were approximately +$7 million compared with net cash flows of approximately +$18 million in the second quarter of 2003. Net cash flows to existing accounts for the six months ended 30 June 2004 were -$3 million compared to +$13 million for the six months ended 30 June 2003.

Net new flows (net contributions to our publicly available funds and flows from new accounts minus closed accounts) were approximately -$73 million for the quarter compared to approximately -$94 million for the same quarter of the prior year. Net new flows were approximately -$202 million and approximately - $178 million for the six months ended 30 June 2004 and 2003, 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 29-year history, the growth in earning power behind clients' portfolios has ranged from approximately 11% to 22%, annually.

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.

Revenues and Profitability

Revenues were $34.3 million for the quarter ended 30 June 2004, up 14.2% from $30.1 million, for the same quarter of 2003. Revenues for the six months ended 30 June 2004 and 2003 were $69.8 million and $59.8 million, respectively.

The average gross management fee was 1.19% for the quarter ended 30 June 2004 and 1.20% for the six months ended 30 June 2004, compared to 1.22% in each of the comparable periods of the prior year.

Total operating expenses increased 4.3% to $19.0 million, for the second quarter 2004, from $18.3 million in the same quarter of the prior year. Total operating expenses were $39.1 million and $36.6 million for the six months ended 30 June 2004 and 2003, respectively.

Pre-tax income, at $15.3 million, was 44.5% of gross revenues for the quarter ended 30 June 2004 compared to $11.8 million or 39.3% of gross revenues in the comparable quarter of the prior year. Pre-tax income was $30.7 million (44.0% of gross revenues) for the six months ended 30 June 2004, and $23.2 million (38.8% of gross revenues) for the six months ended 30 June 2003.

The Company's provision for taxes for the quarter ended 30 June 2004 was $1.5 million versus $1.2 million in the comparable quarter of the prior year, and was $3.1 million versus $2.3 million for the six months ended 30 June 2004 and 2003, respectively. The tax rate was approximately 10% of income before taxes for all such periods.

Other Events

The Company paid a dividend of $0.30 per common share on 30 April 2004 to shareholders of record as of 16 April 2004 and will pay a dividend of $0.30 per share on 30 July 2004 to shareholders of record as of 16 July 2004.

Conference Call

In conjunction with this second quarter 2004 earnings release, W.P. Stewart & Co., Ltd. will host a conference call on Thursday, 29 July 2004. The conference call will commence promptly at 9:15am (EDT) and will conclude at 10:00am (EDT). Those who are interested in participating in the teleconference should dial 1-800-922-0755 (within the United States) or +973-935-2405 (outside the United States). The conference ID is "W.P. Stewart".

To listen to the live broadcast of the conference over the Internet,simply log on to the web at the following address:

http://www.firstcallevents.com/service/ajwz408084180gf12.html

The teleconference will be available for replay from Thursday 29 July, 2004 at 12:00 noon (EDT) through Friday, 30 July, 2004 at 5:00 p.m. (EDT). To access the replay, please dial 1-877-519-4471 (within the United States) or +973-341-3080 (outside the United States). The PIN number for accessing this replay is 4938587.

You will be able to access a replay of the Internet broadcast through Thursday, 5 August, 2004, 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 (symbol: WPL) and on the Bermuda Stock Exchange (symbol: 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 IRINFO@wpstewart.com .

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.