ITG first quarter hit by 'challenging' US trading environment

Source: ITG

ITG (ITG), an independent execution and research broker, today reported results for the quarter ended March 31, 2012.

First quarter 2012 highlights included:

GAAP net income of $5.5 million, or $0.14 per diluted share, compared to GAAP net income of $9.5 million, or $0.23 per diluted share in the first quarter of 2011. On a sequential basis, GAAP net income for the first quarter improved over the GAAP net loss of $3.7 million, or $0.09 per diluted share, and over the $2.7 million of adjusted net income, or $0.07 per diluted share during the fourth quarter of 2011.
Revenues of $136.4 million, compared to $150.1 million in the first quarter of 2011 and $129.9 million in the fourth quarter of 2011.
Expenses of $127.9 million compared to expenses of $132.9 million in the first quarter of 2011 as well as expenses of $136.3 million and adjusted expenses of $125.2 million in the fourth quarter of 2011.
Average daily trading volume in the U.S. of 190 million shares, down 1% from the first quarter of 2011 and up 4% from the fourth quarter of 2011. POSIT® average daily U.S. volume was 96.1 million shares, up 15% from the first quarter of 2011 and up 11% from the fourth quarter of 2011.
The repurchase of 820,000 shares of common stock under ITG's authorized share repurchase program for a total of $9.1 million. Repurchases since the first quarter of 2010 have totaled $98.3 million for 6.9 million shares, resulting in a decrease in shares outstanding, net of new issuances, of more than 11%.

Low levels of institutional trading activity continued to pressure the results of ITG's U.S. operations during the first quarter of 2012. Sell-side client volume represented 48% of total U.S. volumes, up from 44% in the fourth quarter of 2011. Revenues from U.S. operations were $84.6 million in the first quarter of 2012 compared to $100.5 million in the first quarter of 2011 and $83.1 million in the fourth quarter of 2011. ITG's U.S. operations posted net income of $1.7 million in the first quarter of 2012 compared to net income of $7.8 million in the first quarter of 2011 as well as r of 2011 as well as a GAAP net loss of $6.4 million and adjusted net income of $0.3 million in the fourth quarter of 2011.

ITG's International revenues were $51.8 million in the first quarter of 2012 compared to $49.6 million in the first quarter of 2011 and $46.8 million in the fourth quarter of 2011. ITG's International operations posted net income of $3.7 million compared to net income of $1.7 million in the first quarter of 2011 as well as GAAP net income of $2.7 million and adjusted net income of $2.4 million in the fourth quarter of 2011.

"While our strong international performance during the first quarter reflects the investments we've made in building out our global platform, the U.S. trading environment remains challenging," said Bob Gasser, ITG's Chief Executive Officer and President. "We cannot control the overall level of institutional trading activity but we continue to pursue selected growth opportunities while maintaining a focus on expense management and returning cash to stockholders."

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