TMX results top forecasts ahead of LSE deal reviews

Fri May 13, 2011 1:08pm EDT
 
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By Solarina Ho

TORONTO (Reuters) - TMX Group, the operator of the Toronto Stock Exchange, delivered forecast-beating quarterly results on Friday as it prepares for regulatory reviews of its $3 billion plan to join forces with the London Stock Exchange.

Revenue for TMX, which also operates the TSX Venture Exchange for small-capitalization companies and the Montreal Exchange derivatives market, rose 17 percent in the first quarter, thanks to record trading volume and robust equity financing activity.

The gain, which followed a quarter in which revenue slipped, bodes well for the company as it battles growing competition from Alpha Group and other alternative trading venues, which have steadily eroded its once dominant market share.

Net income climbed to C$64.3 million ($66.8 million), or 84 Canadian cents a share, up from C$56.7 million, or 77 Canadian cents, a year earlier. Profit in the latest quarter included an C$8.3 million merger related charge.

On an adjusted basis, TMX earned 97 Canadian cents a share, compared with 77 Canadian cents, a year earlier.

"I, along with maybe one or two others were already on the high end of Street estimates and they exceeded our estimates by a country mile," said National Bank Financial analyst Shubha Kahn, who was looking for earnings of 90 Canadian cents a share.

Revenue came in at C$174.7 million, up from C$149.4 million a year ago.

PROVINCIAL APPLICATIONS   Continued...