Invesco Ltd.'s (IVZ) fourth-quarter net income tumbled 82% as slumping assets under management pressured revenue and outpaced declines in expenses.

The quarter's results have been weak across the board for mutual fund companies, as expected, as equities fell at the end of the year, sending some investors to the exits and into lower-fee bond and money market funds.

Invesco has had its own struggles for several years. But it is finally holding its own largely due to changes that its president and chief executive, Martin Flanagan, has put in place since taking over the Atlanta mutual fund company in August 2005. They include cutting some one-sixth of the work force and boosting sagging investment performance.

Meanwhile, fourth-quarter net income of $31.9 million, or 8 cents a share, is down from $175.9 million, or 43 cents a share, a year earlier. The latest results included 9 cents in restructuring charges, investment write-downs and foreign exchange losses.

Net revenue skidded 38% to $634.4 million as assets under management dropped 29% to $357.2 billion. The drop during the quarter was 13%, less than what peers have reported.

On average, analysts surveyed by Thomson Reuters projected earnings of 17 cents a share and revenue of $658 million.

Fund outflows were $2 billion in the fourth quarter, down from $11.1 billion in the third quarter. There was $4.4 billion in long-term net outflows in the latest quarter, partially offset by $2.4 billion of inflows to money market funds.

In spite of "unprecedented market challenges," Flanagan said Invesco significantly improved its investment performance and strengthened its business in key areas. He added the company "will continue to execute our multi-year strategy and leverage our strong investment performance to further enhance our ability to compete effectively over the long term."

The three- and five-year returns of Invesco funds relative to peers are the best since early 1999. As of Jan. 15, the firm's lineup ranked in the top 36% for three-year results and the top 34% for five-year results, according to fund tracker Lipper.

Before October's market collapse, Invesco's stock had been trading above $20 for the previous two years, a level it had last experienced in mid-2002. The stock closed Thursday at $11.53, down more than half the past four months. It was inactive premarket.

-By Mike Barris, Dow Jones Newswires; 201-938-5658; mike.barris@dowjones.com

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