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ITG reports Q3 2004 results

28 October 2004  |  421 views  |  0 Source: Investment Technology Group

Investment Technology Group, Inc. (NYSE: ITG), a leading provider of technology-based equity trading services, today announced that for the third quarter ended September 30, 2004, revenues were $86.3 million, net income was $10.6 million and diluted earnings per share were $0.25.

To ensure a clear understanding of these financial results, we are separately identifying certain non-recurring items pertaining to an unrealized gain on a security owned subsequent to its initial public offering, an asset impairment write-down, employee separation and lease abandonment costs. Excluding these items, third quarter 2004 revenues were $84.2 million with net income of $11.3 million and earnings per share of $0.27.

Commencing with the third quarter of 2004, the Company's clearing agent has adopted a calendar end of quarter for reporting periods, replacing its past practice of using the last Friday of the month for the first three quarters of each calendar year. As a result, there were 67 trading days in the third quarter of 2004 compared to 63 trading days in last year's comparable period. There will be 64 trading days in the fourth quarter of 2004 vs. 66 in 2003.

Revenues per trading day versus last year's third quarter grew 33% for Client Site Trading Products while declining 34% for POSIT and 7% for the Electronic Trading Desk. Compared to this year's second quarter, revenues per trading day increased 1% for Client Site Trading Products and declined 6% for POSIT and 4% for the Electronic Trading Desk.

"Overall, ITG's U.S. domestic volumes outperformed the market, with an encouraging pick up in volumes in September following the market's weak summer," said Raymond Killian, who returned from retirement in September to serve again as ITG's President and Chief Executive Officer. "We are undertaking a fundamental strategic review of the business and believe that there are a number of good opportunities for ITG to better position itself for future growth."

ITG's International business recorded revenues for the third quarter of $18.2 million, which reflects a 9% increase in revenues per trading day compared to last year's third quarter. These revenues of $18.2 million and pre-tax earnings of almost $1.0 million compared to revenues of $15.7 million and a pre-tax loss of $700,000 in 2003. Earnings per share were $0.01 for our International business in the third quarter of 2004, compared to a loss of $0.02 in the third quarter of 2003.

"We continue to enjoy good growth in our International business and are beginning to see a positive earnings stream with our first ever after tax operating profit for the third quarter" said Mr. Killian. "We achieved record pre-tax operating earnings in Europe, continued our consistent earnings stream in Canada and, for the third consecutive quarter, earned a small profit in our combined Australian/Asian operations."

In the U.S., ITG's trading volume for the third quarter of 2004 was 5.3 billion shares (averaging 79.0 million shares per trading day) compared to 5.0 billion shares in the third quarter of 2003 (averaging 79.6 million shares per trading day) and 5.0 billion in the second quarter of 2004 (averaging 80.8 million shares per trading day). For ITG overall, pre-tax margins for the third quarter were 22.0% excluding non-recurring items, compared to 22.7% in 2003.

Year-to-Date Results
For the nine months ended September 30, 2004, revenues decreased 1% to $244.9 million, net income decreased 4% to $28.3 million and diluted earnings per share increased 6% to $0.66. Excluding non-recurring items, revenues decreased 3% to $240.4 million, net income decreased 7% to $27.5 million and diluted earnings per share increased 3% to $0.64.

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