July 17, 2012 / 8:41 PM / 8 years ago

UPDATE 2-Weak market making weighs on Interactive Brokers profit

* Q2 adj EPS $0.17 vs est $0.19

* Q2 rev falls 12 pct

July 17 (Reuters) - Derivative trader Interactive Brokers Group Inc’s quarterly results missed analysts’ estimates as a strong dollar and weak trading activity weighed on its market making business.

Revenue from the company’s market-making division fell more than 27 percent to $91.3 million in the quarter, while profit before income taxes plunged 60 percent to $24 million.

“The sad fact is that the market-making business is in trouble. It is being squeezed by unfavorable trends that are not likely to reverse in the near future,” Chief Executive Thomas Peterffy said on a conference call with analysts.

“Diminishing market participation by the public customer appears to be the number one culprit,” he added.

Net income available to common shareholders was $8 million, or 9 cents per share, compared with $9.5 million, or 31 cents per share, a year earlier.

Excluding items, the company earned 17 cents per share.

Revenue fell 12 percent to $261 million from a year earlier.

Analysts had expected the company to earn 19 cents per share, on revenue of $304.4 million, according to Thomson Reuters I/B/E/S.

Revenue from the company’s electronic brokerage segment rose marginally to $171.4 million.

During the quarter, Interactive’s cleared daily average revenue trades (DARTs) — a key measure of trading activity for retail brokerage firms — rose 6 percent to 399,000.

Shares of the Greenwich, Connecticut-based company fell almost 2 percent after the bell. They closed at $14.02 on Tuesday on the Nasdaq.

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