TMX Group Posts Loss, Cites Pressure on Boston Options Exchange
February 10, 2010
The operator of the Toronto Stock Exchange and the Boston Options Exchange said Wednesday that it lost $26.8 million in the last quarter of 2009.
TMX Group’s fourth quarter loss on $153.0 million of revenue for compares to a profit of $49.0 million on revenue of $151.1 million in the last quarter of 2008, when other North American stock venues were posting losses.
But NYSE Euronext and Nasdaq OMX Group both reported healthy profits this week, in a turnabout from a year ago.
Nonetheless, the board of TMX Group a dividend of 38 cents for each common share outstanding, payable on March 12, 2010 to shareholders of record at the close of business on February 26, 2010.
Chief Financial Officer Michael Ptasznik noted that TMX was required to take a $77.3 million writedown on its investment in the Boston Options Exchange, “due in part to a decline in the levels of activity on BOX in the highly competitive U.S. equity options market.’’
Without the BOX non-cash goodwill writedown, TMX would have reported earnings per share of 82 cents, fully diluted, for the quarter.
TMX is changing the pricing strategy and management of the Boston Options Exchange, Ptasznik said, in an effort to rebuild the business.
BOX named Tony McCormick, a former member of the options steering committee at Charles Schwab & Co., as its chief executive in October.
BOX said this month it would replace its in-house billing system with an outside, automated service.
TMX Group’s fourth quarter loss worked out to 36 cents a share, down from a profit of 65 cents a year ago.
For the full year, TMX Group, which also operates the Montreal Exchange, the TSX Venture Exchange and the Natural Gas Exchange, said it earned $104.7 million or $1.41 a share on revenue of $556.3 million in 2009. That compared to $182.0 million or $2.48 a share of net income on revenue of $532.6 million in 2008.
Chief executive officer Thomas Kloet said the company was “extremely pleased with the record level of total financings and trading volumes achieved on our equity markets in 2009, a potential indication of broader market recovery from the economic downturn."
In 2009, the company integrated the Montreal Exchange into its operations, acquired an Internet-based venue in crude oil trading and clearing known as NetThruPut Inc. and took a minority stake of just under 20 percent in EDX London Limited, a derivatives exchanged managed by the London Stock Exchange.
