Fidelity Announces pre Tax Profit 20% up in 2007 (AP) (29-02-2008)

BOSTON (AP) -- On Thursday Fidelity Investments announced that its 2007 pretax profit rose by 20% to nearly $2.2 billion as investment performance improved, although customers have been surrendering equity funds and pulled out $18 billion last year.

Boston-based Fidelity reported its income before taxes rose to $2.16 billion last year, up from $1.79 billion in 2006.

The privately held company, which does not report quarterly financial numbers, said revenue rose to a company-record $14.9 billion, up 16 percent from $12.9 billion in 2006.

In the company's annual report to shareholders, Chairman and Chief Executive Officer Edward "Ned" Johnson III said Fidelity's expenses rose -- he didn't specify how much -- because Fidelity added employees and faced more costs from advertising and interest expenses. The higher expenses were partly offset by a one-time gain from revisions in Fidelity's retirement programs.

Fidelity's managed assets at year-end totaled $1.6 trillion, up 15 percent from the end of 2006. Combined administered assets -- including money for which Fidelity performs record keeping and other administrative services -- rose 15 percent, to $3.4 trillion.

Funds managed by Fidelity's investment arm performed better than 73 percent of their competitors last year, Fidelity said, up from 58 percent in 2006. Stock funds beat 72 percent of their peers, up from 47 percent the year before.

Source: AP