UPDATE 2-ITG posts lower-than-expected Q4 profit, shares fall

* Q4 oper EPS $0.27 Vs est $0.34

* Commission revenue down 24 pct

* Sees Jan average daily volume up 15 pct from Q4

* Shares down more than 11 pct (Adds conference call details, analysts comments, updates share movement)

By Archana Shankar and Brenton Cordeiro

BANGALORE, Feb 3 (Reuters) - U.S. agency broker Investment Technology Group Inc's (ITG.N) adjusted quarterly profit fell short of Wall Street estimates and investors became wary about the company's January trading volumes outlook.

On a conference call with analysts, the company said it expects to report that average daily volume for January in the United States would be nearly 15 percent higher than the average monthly volumes for the fourth quarter of 162 million shares.

However, that outlook stands lower than the average trading volume of 202 million the company posted in Jan 2009.

Lower average daily volumes hurt commissions - the largest contributer to the total revenue - that the company gets from trades.

Shares of the company fell as much 11 percent to $18.52 on Wednesday, on the New York Stock Exchange.

"The fact that they took a deep restructuring is somewhat of a signal that they may not think that volumes are necessarily going to come back in the U.S. in a significant way, at least in the short term," Gil Luria of Wedbush Morgan Securities said.

On Dec. 10, the company had said it would cut jobs in the United States as part of its restructuring plan and take a charge of 35 cents to 38 cents a share in the fourth quarter. [ID:nBNG395163]

ITG has global operations, but a major chunk of its revenue comes from the U.S. Its products range from portfolio management and pre-trade analysis to trade execution and post-trade evaluation.

The bright spot for the quarter was the non-U.S. business, analyst Rob Rutschow of Calyon Securities said, adding that the company is in a good position to win new business in Europe.

"The fourth quarter results in Europe give us a lot of visibility and a high degree of confidence that we can continue to grow the region's top and bottom lines," Chief Executive Robert Gasser said on the call.

Q4 PROFIT MISSES STREET

Net loss for the fourth quarter was $7.8 million, or 18 cents a share, while it earned $28.7 million, or 66 cents a share, in the year-ago period.

Excluding restructuring charges, the company posted an adjusted profit of 19 cents a share and recorded another 8 cents a share in employee separation costs.

Analysts expected the company to earn 34 cents a share, according to Thomson Reuters I/B/E/S.

The fall in volatility, combined with continued weakness in the equity asset management business, resulted in lower institutional trading volumes, CEO Gasser said in a statement.

Total revenue for the quarter fell 21 percent to $151.0 million, but narrowly beat analysts' estimate of $149.8 million.

Commission revenue, the largest contributor to total revenue, fell 24 percent to $124.9 million. (Reporting by Archana Shankar and Brenton Cordeiro in Bangalore; Editing by Anil D'Silva, Jarshad Kakkrakandy)