Electronic trading service provider Investment Technology Group Inc. (ITG) reported Wednesday a loss for the fourth quarter, compared to a profit in the year earlier period. The loss reflects significantly lower commissions and fees. Investment Technology's shares are currently trading down by more than 11%.
Investment Technology's fourth-quarter net loss was $7.79 million or $0.18 per share compared to profit of $28.74 million or $0.66 per share in the same period last year. Excluding restructuring charges, pro forma operating income decreased to $8.55 million or $0.19 per share from $29.64 million or $0.68 per share a year ago.
On average, eight analysts polled by Thomson Reuters expected the company to report profit of $0.34 per share for the quarter. Analysts' estimates typically exclude special items.
Total revenues decreased to $151 million from $190.07 million in the prior year period. Analysts expected revenue of $149.84 million for the quarter.
Bob Gasser, chief executive officer and president said, "The fall in volatility, combined with continued weakness in the equity asset management business, resulted in lower institutional trading volumes. However, our fourth quarter restructuring has improved our cost structure and sharpened our business focus, positioning us to benefit as trading conditions and market volumes improve."
On a segmental basis, commissions and fees revenues came down to $124.88 million from $163.36 million last year and recurring revenues rose slightly to $22.19 million from $22.10 million a year earlier.
In the Asia Pacific region, the continued downturn in overall market activity impacted Investment Technology's margins, however it looks ahead to benefits from its investment once the market conditions improve. Further, Investment Technology recorded continued gain in market share in European business, while core business remained strong in Canada.
Full year net income came down to $42.83 million or $0.97 per share from $114.64 million or $2.61 per share last year. Pro forma operating net income more than halved to $59.18 million or $1.34 per share from $115.54 million or $2.63 per share a year earlier. Total revenues for the full year came down to $633.07 million from $762.98 million a year earlier.
Analysts expected revenues of $1.49 per share on revenues of $631.58 million for the full year.
ITG is currently trading at $18.35, down $2.47 or 11.86% on a volume of 1.09 million shares on the Nasdaq.
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