November 5, 2009 / 4:05 PM / 9 years ago

WRAPUP 1- Canaccord earnings strong, GMP disappoints

* GMP says earnings up to C$8.4 million, revenue slips

TORONTO, Nov 5 (Reuters) - Canadian investment dealer Canaccord Capital Inc CCI.TO reinstated its dividend after a strong performance helped by higher trading and investment banking revenues, but results from GMP Capital Inc (GMP.TO) came in well below expectations.

For the quarter ended Sept. 30, Vancouver-based Canaccord earned C$6.7 million ($6.3 million), or 12 Canadian cents a share, compared with a net loss of C$5.4 million, or 11 Canadian cents a share, in the same quarter a year ago.

The result was in line with average analyst profit estimates for 12 Canadian cents a share, according to Thomson Reuters I/B/E/S.

Results were driven by a 12 percent rise in revenue to C$123.7 million. Investment banking revenue grew 40 percent to C$47.6 million, helped by stronger capital markets activity in the United States.

Canaccord said improved operating performance allowed it to approve a quarterly dividend of 5 Canadian cents per share. The company suspended the dividend last year to protect capital.

Canaccord stock was down 2.67 percent to C$10.92 a share.


GMP Capital reported a 21 percent rise in quarterly profit, but said weaker investment banking and commission revenue were still hurting business.

GMP net profit rose to C$8.4 million ($7.91 million), or 12 Canadian cents per share, for the third quarter, from C$6.9 million, or 11 Canadian cents a share, a year ago.

Hit by lower-than-expected revenue, the result fell short of the average analyst estimate for profit of 19 Canadian cents a share, according to Thomson Reuters I/B/E/S.

“The top line was a lot weaker than what I was forecasting,” said Gabriel Dechaine, of Genuity Capital Markets. “And top line momentum is what drives this thing.”

GMP shares fell nearly 7 percent to C$13.82 per share.

GMP said revenue fell 4 percent to C$71.5 million in a capital market environment where merger and acquisition activity has been muted.

“This quarter’s results reflect the slowdown in the markets experienced in July and August which resulted in lower investment banking and commission revenue as markets continued to react to ongoing uncertainty surrounding the global economic recovery,” said Chief Executive Officer Kevin Sullivan.

GMP said capital market revenue was C$51.3 million, or 12 percent less than in the same quarter a year ago.

Investment banking revenue was $28.7 million, down 28 percent from the third quarter of 2008 amid weaker revenue from mergers and acquisitions. ($1=C$1.06)

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