February 12, 2016 / 3:33 AM / 2 years ago

TMX Group's adjusted profit falls, misses estimates

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A TMX Group sign, the company that runs the Toronto Stock Exchange (TSX), is seen in Toronto, June 23, 2014.Mark Blinch

(Reuters) - TMX Group Ltd (X.TO), which owns and operates the Toronto Stock Exchange, reported a fall in fourth-quarter adjusted profit that missed analyst estimates, as sustained low commodity prices hurt a large portion of its resource-based issuers.

"Economic factors, particularly the prolonged slump in commodity values, continued to weigh heavily on the performance of the Canadian economy and on key elements of our market ecosystem," Chief Executive Lou Eccleston said on Thursday.

The company reported a net loss attributable to shareholders of C$159 million ($114.2 million), or C$2.92 per share, compared with a profit of C$41.1 million, or 76 Canadian cents per share, a year earlier.

Excluding impairment charges, TMX Group earned 87 Canadian cents per share for the quarter ended Dec. 31, compared with 93 Canadian cents a year earlier. Revenue fell 3 percent to C$177.1 million.

Analysts on average expected TMX to earn 88 Canadian cents a share on revenue of C$177.05 million, according to Thomson Reuters I/B/E/S.

The company, which reclassified its revenue categories this quarter, said revenue from capital formation fell to C$38.8 million from C$44.8 million a year earlier.

Capital formation includes revenue from listings on Toronto Stock Exchange, TSX Venture Exchange and other issuer services.

The exchange operator had been seeking to diversify its business after suffering from weak commodity prices alongside its rump of resource-linked listings. It moved to expand its offerings for the mutual fund industry in the quarter.

TMX also faces rising competition from aggressive new competitor Aequitas Innovations' Neo exchange and Nasdaq's acquisition of Chi-X Canada.

Up to Thursday's close of C$36.12, the stock has lost nearly a quarter of its value on the Toronto Stock Exchange in the past 12 months.

Reporting by Alastair Sharp in Toronto and Manish Parashar and Parikshit Mishra in Bengaluru; Editing by Gopakumar Warrier

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