Pimco’s Quarterly Profit Up 11% on Strong Inflows

Pimco Advisors Holdings LP said Wednesday that fourth-quarter profit climbed 11.4%, as assets under management at its Pimco Advisors operating unit jumped $44.6 billion, or 22%, and revenue rose more than 16% above revenue a year earlier. The Newport Beach firm, which manages $244.2 billion for institutions and individuals, said fourth-quarter net income rose to $20.4 million, or 40 cents a unit, from $18.3 million, or 38 cents, in the same 1997 quarter.

Pimco’s results matched the average estimate of five analysts surveyed by First Call Corp. Its 1997 results are pro forma, reflecting its acquisition of equity manager Oppenheimer Capital in November of that year.

Pimco ended 1998 with $43.5 billion in long-term fund assets, up 42% from the prior year. The gains were mostly in bonds and money market funds managed for institutions and individuals. The Pimco Total Return Fund, a bond fund, was the second most popular fund last year of more than 7,000 tracked by Boston-based Financial Research Corp.

“Net inflows of $5.4 billion during the fourth quarter mark our strongest quarter in an outstanding year of inflows,” Pimco’s chief executive, William D. Cvengros, said in a statement.

New business at its Pacific Investment Management bond affiliate, which manages the Pimco Total Return Fund, and more mutual fund assets “more than offset net outflows of our institutional equity separate accounts, resulting in record net inflows of $21 billion for the year,” Cvengros said.

Pimco stock closed at $29.31 a share, down 31 cents.

Revenue at Pimco Advisors operating unit climbed 17.5% to $228 million from $194.1 million.

For the year, Pimco Advisors Holdings reported earnings of $76.1 million, or $1.52 per unit, up from pro forma net income of $66 million, or $1.52 per unit, the previous year.

Revenue at the operating unit totaled $852.4 million last year, up from $704.8 million in 1997.