* Adj EPS C$0.78 vs est C$0.73
* Revenue rises 6 pct from year ago
* Financing and equity trading volumes fall
* Slip in commodity prices hurt resource company activity
By Alastair Sharp
TORONTO, May 10 TMX Group Ltd, the
operator of the Toronto Stock Exchange, reported a
better-than-expected profit for the first quarter and said
revenue rose 6 percent despite a tough economic backdrop that
weighed on trading volumes and issuance.
But the comparison to year-ago results is complicated by the
fact that TMX was acquired in September by a consortium of
Canadian financial institutions who also rolled in the smaller
Alpha exchange and Canadian Depository for Securities Ltd, a
Including these additional assets in the 2012 numbers for
TMX, income from operations fell 24 percent to C$60.2 million.
Net income for the quarter was C$37.8 million ($37.7
million), or 70 Canadian cents per share.
Excluding acquisition and other costs, earnings were 78
Canadian cents per share, beating the average analyst forecast
of 73 Canadian cents, according to Thomson Reuters I/B/E/S.
Revenue rose to C$172.2 million in the quarter, from C$162.3
million a year ago. But revenue fell 5 percent from the first
quarter due mainly to a drop in fees from share listings.
TMX also owns the Montreal derivatives exchanges and the TSX
Venture Exchange, where listings are heavily weighted toward the
"The cyclical slowdown in commodities means that economies
like Canada will suffer somewhat," TMX chief executive Tom Kloet
said on a conference call with analysts and investors. "The most
pronounced affect of these macroeconomic factors has been in our
equity listing and trading business."
Analysts have suggested that TMX look outside of Canada for
opportunities to diversify away from resources. But large
acquisitions may be curtailed by the high level of debt TMX took
on in the takeover by the bank-led Maple consortium last year.
Equity trading volumes fell by nearly 20 percent compared
with the first quarter of 2012.
The number of follow-on offerings fell nearly 20 percent
from the fourth quarter, while the value of those offerings fell
by almost 30 percent.