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Fidelity Investments parent FMR Corp. reported 2002 net income fell 39% as the bear market continued to batter the bottom line. The company's top official hinted that the market may see more bad days ahead.

The closely held parent of the nation's largest mutual-fund company said net income totaled $808 million, down from $1.33 billion. Revenue declined 9% to $9.81 billion. Fidelity's assets under management, meanwhile, declined 14% to $773.8 million

"Although we are not pleased with income result, we recognize that declines during down markets are difficult to avoid," said Chairman Edward C. Johnson III.

The company also noted that Fidelity's mutual funds outperformed 70% of their competitors, an improvement from 66% outperformance in 2001.

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While Fidelity could balm the 2002 losses at funds such as flagship Fidelity Magellan with performance that beat the majority of its peers, Johnson signaled that the investment outlook might not brighten any time soon.

"Even if corporate earnings go up, there is no guarantee that the market will follow," Mr. Johnson said. "The market is always unpredictable, but there are times when it is more difficult to read than others. Our gut feeling is that this is one of those periods."