Thursday, MF Global Ltd. (MF), a clearing service provider for exchange-traded and over-the-counter derivative markets, reported a loss for the first quarter from last year, as revenues declined on a decrease in exchange volumes and certain one-time charges.
Net loss available to common shareholders for the first quarter was $32.83 million or $0.27 per share, compared to an income of $14.39 million or $0.12 per share last year.
First quarter net loss included a foreign currency translation loss of $16.3 million, accelerated amortization of debt issuance costs related to repayment of the $240 million term loan of $9.7 million, stock compensation related to IPO awards of $8.8 million, severance charges of $1.9 million and Sarbanes-Oxley costs of $0.9 million.
On average, 11 analysts polled by Thomson Reuters expected the company to report earnings of $0.04 per share for the quarter. Analysts' estimates typically exclude special items.
Total revenues for the period declined to $510.35 million from $913.85 million in the previous year. The decline in revenue was primarily due to a decrease in exchange volumes, lower interest rates and narrower spreads from matched principal transactions.
Net revenue, net of interest and transaction-based expenses, for the first quarter was $271.52 million, a decline from $374.65 million reported in the similar quarter last year.
Analysts expected a revenue of $271.32 million for the first quarter.
Execution only commissions for the first quarter declined to $79.29 million from $119.06 million a year ago. Cleared commissions declined to $259.52 million from $374.17 million last year. Revenue from principal transactions declined to $45.71 million from $63.16 million in the previous year. Interest income declined to $112.19 million from $345.82 million a year ago. Other revenues increased to $13.64 million from $11.64 million last year.
Employee compensation and benefits during the quarter totaled $172.7 million, or 63.6% of net revenue, compared to $210.7 million, or 56.2% in the same period last year.
The company reported a loss on extinguishment of debt of $9.68 million for the quarter. Preferred stock dividend for the quarter was $7.68 million.
Total first quarter 2010 exchange traded volumes were 429.7 million contracts, compared to 542.5 million for the same period last year. Execution-only volumes were 131.5 million contracts, compared to 155.8 million for the same period last year. Cleared volumes for the first quarter were 298.2 million contracts, compared to 386.7 million in the similar period a year ago.
MF closed Thursday's regular trading at $6.20, down 0.24 or 3.73%, on a volume of 2.55 shares on the NYSE.
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