Investment Technology Group Inc. (ITG, Financial) filed Quarterly Report for the period ended 2009-03-31.
Investment Technology Group is one of the leading providers of technology-based equity trading services and transaction research to institutional investors and brokers. ITG's services help clients to access liquidity execute trades more efficiently and make better trading decisions. They offer a fully-integrated family of advanced trading services encompassing three business lines: POSIT Client-Site Trading Products and Electronic Trading Desk. Investment Technology Group Inc. has a market cap of $997.5 million; its shares were traded at around $23 with a P/E ratio of 10 and P/S ratio of 1.2. Investment Technology Group Inc. had an annual average earning growth of 8.2% over the past 10 years. GuruFocus rated Investment Technology Group Inc. the business predictability rank of 2.5-star.
In Canada, ITGs First Quarter 2009 revenue was $17.6 million, decreasing 19% from First Quarter 2008. The revenue decline was entirely the result of the strengthening of the U.S. Dollar, which reduced revenues by approximately $4.2 million. In Canadian Dollars, revenues were slightly higher from First Quarter 2008.
Our International Operations were adversely affected by further declines in the value of shares traded in First Quarter 2009. Trading commissions are generally based on the value of a customer trade, or ad valorem. Although our market share increased, declines in major international indices such as the MSCI Pan European, Nikkei 225, Hang Seng and ASX 200 Index of 41.6%, 35.3%, 40.6% and 33.1%, respectively, were a primary driver in our International Operations revenues decreasing 27% to $20.7 million in First Quarter 2009 relative to First Quarter 2008. Furthermore, the strengthening of the U.S. Dollar relative to other major currencies, particularly the Pound Sterling negatively impacted revenue by $6.5 million.
The pre-tax loss in our International Operations was $6.9 million, versus a $1.6 million loss posted in First Quarter 2008. A $1.5 million currency effect positively impacted our International pre-tax results during First Quarter 2009. In First Quarter 2008, our pre-tax results in International Operations were negatively impacted by $0.6 million due to currency translation.
Other expenses, which reflected the benefits of certain cost control measures during the quarter, increased only $1.4 million in spite of higher (i) amortization expense related to new product releases, (ii) network connectivity and market data fees, (iii) legal fees and (iv) other equipment related costs, including depreciation, which collectively increased $5.6 million over the prior year period. Savings were achieved through lower spending levels in certain areas including business development, recruiting and consulting, as well as through improved receivable collections.
Total operating expenses of $11.7 million were down $3.3 million or 22% from First Quarter 2008 and included a favorable exchange rate impact of $2.7 million resulting from a weaker Canadian Dollar.
Read the The complete ReportITG is in the portfolios of Third Avenue Management, John Keeley of Keeley Fund Management.
Investment Technology Group is one of the leading providers of technology-based equity trading services and transaction research to institutional investors and brokers. ITG's services help clients to access liquidity execute trades more efficiently and make better trading decisions. They offer a fully-integrated family of advanced trading services encompassing three business lines: POSIT Client-Site Trading Products and Electronic Trading Desk. Investment Technology Group Inc. has a market cap of $997.5 million; its shares were traded at around $23 with a P/E ratio of 10 and P/S ratio of 1.2. Investment Technology Group Inc. had an annual average earning growth of 8.2% over the past 10 years. GuruFocus rated Investment Technology Group Inc. the business predictability rank of 2.5-star.
Highlight of Business Operations:
In First Quarter 2009, our consolidated revenue decreased 24% to $155.7 million relative to First Quarter 2008 while our operating expenses decreased 9% to $132.2 million. Net income for First Quarter 2009 was $12.8 million, or $0.29 per diluted share, as compared to $33.0 million, or $0.75 per diluted share in First Quarter 2008. Our U.S. based revenue was $117.4 million in First Quarter 2009, declining $37.0 million, or 24% compared to First Quarter 2008. Our consolidated results include severance charges which reduced net income and earnings per diluted share by $4.3 million and $0.10, respectively, in First Quarter 2009 versus severance charges which reduced net income and earnings per diluted share by $0.7 million and $0.02, respectively, in First Quarter 2008.In Canada, ITGs First Quarter 2009 revenue was $17.6 million, decreasing 19% from First Quarter 2008. The revenue decline was entirely the result of the strengthening of the U.S. Dollar, which reduced revenues by approximately $4.2 million. In Canadian Dollars, revenues were slightly higher from First Quarter 2008.
Our International Operations were adversely affected by further declines in the value of shares traded in First Quarter 2009. Trading commissions are generally based on the value of a customer trade, or ad valorem. Although our market share increased, declines in major international indices such as the MSCI Pan European, Nikkei 225, Hang Seng and ASX 200 Index of 41.6%, 35.3%, 40.6% and 33.1%, respectively, were a primary driver in our International Operations revenues decreasing 27% to $20.7 million in First Quarter 2009 relative to First Quarter 2008. Furthermore, the strengthening of the U.S. Dollar relative to other major currencies, particularly the Pound Sterling negatively impacted revenue by $6.5 million.
The pre-tax loss in our International Operations was $6.9 million, versus a $1.6 million loss posted in First Quarter 2008. A $1.5 million currency effect positively impacted our International pre-tax results during First Quarter 2009. In First Quarter 2008, our pre-tax results in International Operations were negatively impacted by $0.6 million due to currency translation.
Other expenses, which reflected the benefits of certain cost control measures during the quarter, increased only $1.4 million in spite of higher (i) amortization expense related to new product releases, (ii) network connectivity and market data fees, (iii) legal fees and (iv) other equipment related costs, including depreciation, which collectively increased $5.6 million over the prior year period. Savings were achieved through lower spending levels in certain areas including business development, recruiting and consulting, as well as through improved receivable collections.
Total operating expenses of $11.7 million were down $3.3 million or 22% from First Quarter 2008 and included a favorable exchange rate impact of $2.7 million resulting from a weaker Canadian Dollar.
Read the The complete ReportITG is in the portfolios of Third Avenue Management, John Keeley of Keeley Fund Management.
