W.P. Stewart & Co., Ltd. Reports Net Income For Third Quarter

     Third Quarter 2005 Highlights

    Cash earnings for the quarter ended 30 September 2005 were $14.9 million (net income of $12.2 million adjusted to include $2.7 million representing non-cash expenses of depreciation, amortization and other non-cash charges on a tax effected basis), or $0.32 per share (diluted).  In the same quarter of the prior year, cash earnings were $15.8 million (net income of $13.7 million adjusted for the inclusion of $2.1 million representing non-cash expenses of depreciation, amortization and other non-cash charges on a tax-effected basis), or $0.35 per share (diluted). 

    Assets under management at quarter-end were approximately $9.6 billion, compared to $8.8 billion at the end of the prior quarter, an increase of 9.1% and an increase of 12.9% from the $8.5 billion reported at 30 September 2004.

    For the third quarter of 2005 there were 45,991,471 common shares outstanding on a weighted average diluted basis compared to 45,532,139 common shares outstanding for the third quarter of 2004 on the same weighted average diluted basis.

     Nine Month Results

    For the nine months ended 30 September 2005, net income was down 9.8%, compared to the first nine months of 2004, to $37.3 million, or $0.81 per share (diluted) and $0.82 per share (basic), on revenues of $102.4 million. Net income for the nine months ended 30 September 2004 was $41.3 million, or $0.91 per share (diluted) and $0.92 per share (basic), on revenues of $103.9 million.

    Cash earnings for the nine months ended 30 September 2005 were $45.4 million (net income of $37.3 million adjusted to include $8.1 million, representing non-cash expenses of depreciation, amortization and other non-cash charges on a tax-effected basis), or $0.99 per share (diluted).  In the same period of the prior year, cash earnings were $47.2 million (net income of $41.3 million adjusted for the inclusion of $5.9 million representing non-cash expenses of depreciation, amortization and other non-cash charges on a tax-effected basis), or $1.04 per share (diluted).

    On a limited number of its accounts, the Company is entitled to receive a performance-based fee depending on the absolute performance in the account over a specified time period or in some cases by the out-performance in the account relative to a chosen benchmark. Based on performance through the end of the third quarter of 2005, the Company may be entitled this year to a performance fee on some of those accounts, including on W.P. Stewart Holdings N.V., our mutual fund listed on Euronext Amsterdam.  Regardless of performance at any other point during the year, the Company's right to receive a performance fee on those accounts will depend entirely upon the account's performance on 31 December, the date that the performance fee is measured and earned.

    For the nine months ended 30 September 2005, there were 45,895,724 common shares outstanding on a weighted average diluted basis compared to 45,472,802 common shares outstanding for the same period in 2004 on the same weighted average diluted basis.

     Performance

    Performance in the W.P. Stewart & Co., Ltd. U.S. Equity Composite
(the "Composite") for the third quarter of 2005 was 9.4% pre-fee and 9.2% post-fee, compared to 3.6% for the S&P 500. For the nine months ended 30 September 2005, performance in the Composite was 5.8% pre-fee and 4.9% post-fee, compared to 2.8% for the S&P 500. For the twelve month period ending 30 September 2005, performance in the Composite was 22.6% pre-fee and 21.5% post-fee, compared to 12.3% for the S&P 500.

    W.P. Stewart's five-year performance record for the period ended 30 September 2005 averaged 4.0% pre-fee (2.8% post-fee), compounded annually, compared to an average of -1.5% for the S&P 500 in the five-year period.

    In each of the one, five and ten-year periods, ended 30 September 2005, performance of the Composite has exceeded the performance of the S&P 500 on a pre-fee and on a post-fee basis. For the three-year period ending 30 September 2005, performance exceeded the S&P 500 on a pre-fee basis but not on a post-fee basis.

     Assets Under Management

    Assets under management (AUM) at quarter-end were approximately $9.6 billion, compared with $8.8 billion at the quarter ended 30 June 2005, and $8.5 billion reported at the quarter ended 30 September 2004.

    Total net flows of AUM for the quarter ended 30 September 2005 were +$28 million, compared with -$67 million in the comparable quarter of 2004 and -$115 million in the second quarter of 2005.

     Total net flows of AUM for the nine months ended 30 September 2005 and 2004 were -$130 million and -$275 million, respectively.

    In the third quarter of 2005, net cash flows to existing accounts were +$23 million compared with net cash flows of -$29 million in the third quarter of 2004.  Net cash flows to existing accounts for the nine months ended 30 September 2005 were -$65 million compared to -$33 million for the nine months ended 30 September 2004.

    Net new flows (net contributions to our publicly available funds and flows from new accounts minus closed accounts) were +$5 million for the quarter compared to -$38 million for the same quarter of the prior year. Net new flows were -$65 million for the nine-months ending 30 September 2005 compared to -$242 million for the nine months ended 30 September 2004.

     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 history, the growth in earning power behind clients' portfolios has ranged from approximately 11% to 22%, annually.

    Currently, such earning power behind clients' portfolios 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 $33.7 million for the quarter ended 30 September 2005, down 1.2% from $34.1 million for the same quarter of 2004. Revenues for the nine months ended 30 September 2005 and 2004 were $102.4 million and $103.9 million, respectively.

    The average gross management fee was 1.17% for the quarter ended 30 September 2005 and 1.17% for the nine months ended 30 September 2005, compared to 1.19% and 1.20%, respectively, in each of the comparable periods of the prior year.

    Total operating expenses increased 6.4% to $20.1 million, for the third quarter 2005, from $18.9 million in the same quarter of the prior year. Total operating expenses were $60.9 million and $58.0 million for the nine months ended 30 September 2005 and 2004, respectively.

    During 2004 and through the first nine months of 2005, the Company issued restricted stock to various employees. The non-cash compensation expense related to these restricted stock grants was approximately $820,000 for the third quarter of 2005 and approximately $2.3 million for the nine months ended 30 September 2005. This non-cash compensation expense is included in "employee compensation and benefits". We expect non-cash compensation expense related to these restricted stock grants to be at least $3.1 million for 2005.

    Pre-tax income, at $13.6 million, was 40.4% of gross revenues for the quarter ended 30 September 2005 compared to $15.2 million or 44.6% of gross revenues in the comparable quarter of the prior year. Pre-tax income was
$41.5 million (40.5% of gross revenues) for the nine months ended 30 September 2005, and $45.9 million (44.2% of gross revenues) for the nine months ended 30 September 2004.

    The Company's provision for taxes was $1.4 million for the three-month period ended 30 September 2005 versus $1.5 million in the comparable period of 2004. The provision for taxes for the nine months ended 30 September 2005 was $4.2 million versus $4.6 million in the comparable period of the prior year. The effective tax rate was approximately 10.1% and 10% of income before taxes for the nine-month periods ended 30 September 2005 and 2004, respectively.

     Other Events

    The Company paid a dividend of $0.30 per common share on 29 July 2005 to shareholders of record as of 15 July 2005 and will pay a dividend of $0.30 per share on 28 October 2005 to shareholders of record as of 14 October 2005.

     Conference Call

    In conjunction with this third quarter 2005 earnings release, W.P. Stewart & Co., Ltd. will host a conference call on Thursday, 27 October 2005. 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 1-800-370-0898 (within the United States) or +973-409-9260 (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 http://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 October, 2005 at 12:00 noon (EDT) through Friday, 28 October, 2005 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 6574252.

    You will be able to access a replay of the Internet broadcast through Thursday, 3 November, 2005, 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.