Knight Capital Group, Inc. today reported earnings from continuing operations of $29.9 million, or $0.33 per diluted share, and a loss from discontinued operations, net of tax, of $20.5 million, or $0.23 loss per diluted share. On a consolidated basis, the company reported earnings of $9.4 million, or $0.10 per diluted share, for the first quarter of 2009. For the first quarter of 2008, the company reported earnings from continuing operations of $35.1 million, or $0.38 per diluted share, and a loss from discontinued operations, net of tax, of $2.6 million, or $0.03 loss per diluted share. On a consolidated basis, the company reported earnings of $32.5 million, or $0.35 per diluted share, for the first quarter of 2008.
Revenues from continuing operations for the first quarter of 2009 were $245.4 million, compared to $194.0 million from continuing operations for the first quarter of 2008.
"Knight reported a solid first quarter while investing in strategic growth initiatives and managing the firm's exit from the asset management business," said Thomas M. Joyce, Chairman and Chief Executive Officer, Knight Capital Group. "Our performance is attributable to the dynamic and adaptable nature of our hybrid model and the success of our strategic decision to expand our non-equity businesses, particularly fixed income. Global Markets revenues advanced due to ongoing diversification across clients, order flow, products and services, asset classes and geographies. Pre-tax margins were affected by increased costs associated with opportunistic hiring, investments in trading technology and infrastructure expenses for our geographic expansion."
"Continuing operations" includes the company's Global Markets and Corporate operating segments. Amounts reported as "discontinued operations" include the company's Asset Management segment, which, on March 31, 2009, closed the sale of substantially all of Deephaven's assets to affiliates of Stark & Roth, Inc. As of that date, Deephaven was replaced as the investment adviser for the Deephaven funds, and the company has exited from the asset management business.
"Looking ahead, we will continue to make investments in expanding our offering across asset classes, enhancing our trading technology and selectively hiring new talent," said Mr. Joyce. "We remain focused on exceeding our goal of 20% pre-tax margins across all market cycles and further strengthening our position on the new Wall Street."
UMC Price at posting:
$1.07 Sentiment: Hold Disclosure: Held
