Waddell & Reed Financial, the Overland Park, Kan.-based mutual fund manager, announced today that its third quarter profits were down over 40% from last year. Profits from the third quarter of this year were $20.4 million, down from $34.5 million in 2000.

However, that decline includes a $5.1 million expense in the form of stock loans to financial advisors at the time of the firm’s initial public offering. Still, excluding that expense, the third quarter profit of $25.5 million is 26% less than the firm’s third quarter 2000 profit.

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