eSpeed cuts Q2 profit forecast as competition bites

eSpeed cuts Q2 profit forecast as competition bites

Electronic bond trading platform eSpeed has cut its second quarter profit forecast due to increased price competition in the market and reduced trading volumes in Europe.

Following this latest announcement eSpeed shares fell 19 cents during trading on Thursday, closing at $17.46, about one dollar above its 52 week low. Overall shares in eSpeed have fallen about 26% this year.

ESpeed says earnings and revenue will undercut expectations and now expects operating income of 15 cents to 16 cents per share - down from previous forecasts of 19 cents to 20 cents - on revenue of $42 million to $43 million in the three months to June 30.

The company expects to show total electronic trading volume, including fully electronic and voice-assisted transactions, of roughly $11 trillion for the second quarter, down eight per cent from the first quarter but up from 7.8 trillion from a year earlier.

Howard Lutnick, chairman and CEO of eSpeed, says: "Our weaker than expected performance during the second quarter was due to erosion of our market position from competitive pricing pressure and lower than expected market volumes in Europe."

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