Pimco Earnings to Be Lower Than Expected

Pimco Advisors Holdings LP, which is being acquired by insurer Allianz AG, said Friday that fourth-quarter earnings would fall below expectations because of transaction costs and fund outflows. The Newport Beach asset manager, which controls the biggest U.S. bond manager, expects to earn 33 cents to 35 cents a unit in the final three months of 1999, down from 42 cents in the third quarter. A survey of five analysts by First Call Corp. forecast earnings of 44 cents per unit. The firm incurred “significant costs” in the fourth quarter related to the transaction to Germany’s Allianz, which is acquiring 70% of Pimco for about $3.3 billion in cash. Pimco also warned that it expects to incur “substantial additional costs” in the first quarter from the sale to Allianz. Pimco shares closed unchanged Friday at $37.88. The earnings projection was announced after U.S. markets closed.