TORONTO TMX Group Ltd (X.TO), the owner of Canada's main stock exchange, said its revenue and profit slipped in the third quarter from three months earlier amid lackluster trading activity.
Comparing TMX's performance with that of the year-before quarter is complicated because a group of Canadian financial institutions bought TMX last September and combined it with the smaller Alpha stock exchange and the Canadian Depository for Securities Ltd, a trading clearinghouse.
The Toronto Stock Exchange operator's net income was C$19.2 million, or 35 Canadian cents a share, on revenue of C$165.3 million, the company said on Thursday.
On an adjusted basis the company earned 75 cents a share, which excluded costs to refinance a credit facility and costs associated with the company's acquisition by the Maple consortium.
Analysts had on average expected TMX to earn 62 Canadian cents a share on revenue of C$175.2 million, according to Thomson Reuters I/B/E/S.
When TMX's results in the year-before quarter are combined with those of Alpha and the clearinghouse, the 2013 quarter shows a 5 percent fall in income and a 1.8 percent rise in revenue, which was C$162.3 million a year earlier.
The company has struggled to offset the cyclical swing away from commodities, and trading volumes for the main Toronto Stock Exchange have been erratic in the quarter, with both sharp monthly rises and falls compared to year-ago volumes.
"While the continued softness in capital markets activity in Canada has impacted our financial performance, TMX Group continued to advance its operational and strategic goals in the third quarter," chief executive Thomas Kloet said in the earnings statement.
TMX also owns the Montreal derivatives exchanges and the small-cap TSX Venture Exchange, where listings are heavily weighted toward the resource sector.
The exchange operator faces increasing competition from rival Chi-X and as Royal Bank of Canada-backed (RY.TO) Aequitas prepares to launch late in 2014 or in early 2015.
TMX is pushing for regulators to relax rules so that retail investors could more easily participate in small financings long deemed too risky to the general public.
(Reporting by Alastair Sharp; Editing by Chizu Nomiyama)