Canaccord profit falls but tops street, shares rise
TORONTO (Reuters) - Canaccord Financial's third-quarter profit plunged 94 percent on a weak market and one-time charges, but the core result topped analysts' estimates, prompting investors to push the Canadian brokerage's shares higher.
Vancouver-based Canaccord (CF.TO: Quote) said on Wednesday it earned C$2.5 million ($2.5 million), or 1 Canadian cent a share, in the quarter ended December 31. That compared with a year-before profit of C$43 million, or 51 Canadian cents a share.
Excluding restructuring and acquisition-related charges, the company earned 11 Canadian cents a share, beating analysts' expectations of a profit of 8 Canadian cents a share, according to Thomson Reuters I/B/E/S.
Shortly after the results were released, its stock was up 33 Canadian cents, or 3.8 percent, at C$8.92 on the Toronto Stock Exchange.
During the quarter, Canaccord closed its C$42.2 million acquisition of 50 percent of Australian firm BGF Equities and launched a 253 million pound ($400 million) takeover of British broker and advisory group Collins Stewart Hawkpoint CSHP.L.
Revenue in the quarter dropped 42 percent to C$147.9 million, as slumping market activity hurt investment banking and trading activity.
Advisory revenue from subsidiary Canaccord Genuity rose 53 percent to C$38.5 million, however, due to robust cross-border merger activity, the company said.
($1 = 0.6322 British pounds)
($1 = 0.9954 Canadian dollars)
(Reporting By Cameron French; Editing by Janet Guttsman)
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