Instinet earnings hit by WTC and falling volumes

Instinet earnings hit by WTC and falling volumes

Instinet has warned that third quarter earnings will suffer as a result of the recent shut-down in US equity markets and a general decline in share volumes during the quarter.

Instinet, which lost two employees during the attacks on the World Trade Centre, estimates that the impact to pre-tax earnings in the third quarter will be approximately $18 million, or $0.04 cents per share after tax, consisting primarily of lost revenue associated with the four-day closure of US equity markets.

Instinet's clearing and settlement operations as well as a telecommunications hub were located in the World Trade Centre. The company believes that substantially all assets physically located at the twin towers were covered by its insurance.

Doug Atkin, president and CEO of Instinet, comments: "From a technical and operational standpoint, our back-up systems performed superbly and rapidly, and our US equity business resumed without incident when the US markets reopened."

Further, he noted that the company's international operations continued without interruption throughout the crisis. "Going forward," he says, "we believe that Instinet's market leadership and strong balance sheet will enable us to overcome any short-term challenges."

The company has also been impacted by weak economic conditions and other factors that have dampened overall market volumes.

Instinet's share of trading volume in Nasdaq-listed equity securities is expected to be 13.3 - 13.5% in the third quarter, slightly ahead of the comparable period in 2000 but below the second quarter level.

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