October 29, 2009 / 8:45 PM / 10 years ago

UPDATE 2-GFI Group Q3 profit hurt by weak brokerage revenue

* Q3 EPS $0.06 vs est $0.09

* Brokerage revenue falls 19 pct

* Says equity trading volumes fall

* Sees decline in Q4 revenue (Recasts, adds details about Q3, Q4 outlook)

Oct 29 (Reuters) - Lower trading volumes and a 19 percent fall in brokerage revenue dragged inter-dealer broker GFI Group Inc’s GFIG.O quarterly profit below analysts expectations.

The company said it saw a decline in equity trading volumes in both the United States and Europe, as market volatility was dramatically lower than in the year-ago quarter.

“Trading volumes continue to be depressed to some degree due to the uncertainty in the banking and regulatory environment,” Chief Executive Michael Gooch said in a statement.

The CBOE Volatility Index .VIX, Wall Street’s favorite barometer of investor sentiment, closed at 24.76 on Wednesday, down 11 percent, its biggest percentage fall in the past 8 months.

For the fourth quarter, the company expects total revenue to decrease by 3 percent to 7 percent compared with non-GAAP revenue of $210.9 million in the year-ago quarter.

Net income for the third quarter was $2.8 million, or 2 cents a share, compared with a net loss of $6.7 million, or 6 cents a share, in the year-ago period. Excluding items, the company earned 6 cents per share.

Analysts on average had expected the company to earn 9 cents a share, according to Thomson Reuters I/B/E/S.

Total revenue fell 21 percent to $192.2 million. Brokerage revenue, the largest contributor to total revenue, fell to $184.4 million from $226.4 million.

Regarding regulations aimed at bringing about transparency in the capital markets, the CEO said “the regulatory issues that have clouded the prospects of the derivatives market will be largely resolved over the coming months.”

Shares of the company closed up 5 percent at $6.66 Thursday on Nasdaq. The stock has gained 79 percent in value since the beginning of this year. (Reporting by Sweta Singh in Bangalore; Editing by Gopakumar Warrier, Anthony Kurian)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below