UPDATE 1-TMX profit above forecast but Canada market volume weak

Thu Aug 1, 2013 11:25am EDT
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* Operating income slips, company looks to cut costs

* Shares up 1.6 percent

By Alastair Sharp

TORONTO, Aug 1 (Reuters) - Shares in TMX Group Ltd, owner of Canada's biggest stock exchange, gained on Thursday after the company reported a better-than-expected second-quarter profit, helped by the sale of a fixed income service but limited by limp trading volumes.

The Toronto Stock Exchange operator's net income was C$25.5 million ($24.8 million), or 47 Canadian cents a share, on revenue of C$182.3 million.

Comparing TMX's performance with that of the year-before quarter is complicated because a group of Canadian financial institutions bought TMX last September and combined it with the smaller Alpha stock exchange and the Canadian Depository for Securities Ltd, a trading clearinghouse.

The company reported adjusted earnings of 89 Canadian cents a share, excluding charges related to the sale of a price index, an increase in deferred income tax liabilities, and charges related to the amortization of intangibles

In a deal that closed in April, TMX sold its PC-Bond fixed-income pricing service for C$155.1 million in cash and shares.

The company's second-quarter adjusted earnings of 74 Canadian cents a share topped analysts' expectations of 69 Canadian cents, according to Thomson Reuters I/B/E/S, which had already adjusted its estimate to include a charge of 15 Canadian cents related to the amortization of intangibles.   Continued...