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(Adds investor comment, details, updates share move)
By Alastair Sharp
TORONTO, May 10 (Reuters) - Shares of Toronto Stock Exchange operator TMX Group Ltd fell more than 7 percent on Wednesday, after reporting first-quarterly profit that missed estimates as revenue from new businesses failed to take off.
The company also reported declines in revenue from derivatives and energy trading along with a drop in revenue from new ventures, including a data analytics product launched last year, that missed the forecasts of some analysts.
The company is in the midst of a cost-cutting drive, selling a string of assets and slashing staff even as it invests in seeking out more profitable avenues for growth.
"Growth from business initiatives has yet to make its mark on the top line," CIBC World Markets said in a note.
New projects include a private equity marketplace, cattle trading platform and a Chinese joint venture working to speed cross-border investments into China's $9 trillion bond market. It has also divested a low-latency connection between Toronto and New York and its risk management business.
Yet some market participants remain skeptical about the strategy.
"They face significant costs going forward as they implement their strategy," said Michael Sprung, whose Sprung Investments sold out of the stock some time ago.
The stock was down 7.4 percent at C$72.44 in afternoon trading, after dipping as low as C$71.65, its lowest since April 13.
The shares had gained some 20 percent from a late-March trough to Tuesday's close, compared to a 1.5 percent rise in the broader index over the same period.
Excluding items, the company posted per-share profit of C$1.11, well below the average analyst estimate of C$1.22 per share.
Total revenue rose 4.7 percent to C$186.1 million, but missed the average estimate of C$191.9 million, according to Thomson Reuters I/B/E/S. (Additional reporting by Muvija M in Bengaluru; Edited by Jeffrey Benkoe and Bernard Orr)