BOSTON (AP)—Fidelity Investments said on Wednesday that its operating income rose 13 percent in 2011, the third consecutive year of rising profits for the privately held company after a slowdown during the financial crisis.
Gains at Fidelity's brokerage and workplace savings businesses helped offset weakness at Fidelity's mutual fund operations, including a 4 percent decline in investment assets that Fidelity manages.
Operating income rose to $3.33 billion last year from $2.95 billion in 2010.
Fidelity has come back steadily since 2008, when its operating income slipped as declining markets cut into the value of investments that generate management fee income. It reported year-over-year operating income gains of 5 percent in 2009 and 17 percent in 2010. Operating income excludes items such as interest expenses and taxes.
Revenue rose 3 percent last year to nearly $12.76 billion from about $12.35 billion.
The Boston-based company reports limited financial performance data in an annual report released to its private shareholders. Fidelity is the nation's second-largest mutual fund company, behind Vanguard Group.
A letter to shareholders from CEO and Chairman Edward "Ned" Johnson III said the company posted "solid" results that were among the best-ever at the 66-year-old company. Johnson said Fidelity held expense growth to 1 percent, despite investments in new technology and the company's work force of more than 39,700.
Johnson, who is 81, offered no clues as to when he might retire or name a successor to the leadership posts he has held since 1977. His family owns a 49 percent stake in the company, with key employees owning the rest.
Fidelity says it has a succession plan but won't disclose details. A company spokesman said Wednesday that Johnson has no plans to retire.
Assets under management, a key driver of Fidelity's revenue, fell to $1.52 trillion at year's end from $1.59 trillion at the close of 2010. Total customer assets—including money for which Fidelity performs record keeping and other administrative services—slipped 3 percent to $3.39 trillion from $3.48 trillion.
