April 23, 2008 / 8:58 PM / 9 years ago

Montreal Exchange profit rises despite revenue fall

TORONTO, April 23 (Reuters) - Montreal Exchange Inc MXX.TO said on Wednesday its profit rose in the first quarter as lower expenses more than offset a 6 percent decline in revenues.

On May 1, Montreal Exchange will be acquired by Toronto Stock Exchange operator TSX Group Inc (X.TO), making this the last full quarter for the Montreal derivatives bourse as a separate public company.

The exchange said it earned C$8.4 million ($8.2 million), or 27 Canadian cents a share, in the three months ended March 31. That compares with profit of C$5.6 million, or 20 Canadian cents a share, a year earlier.

Expenses fell 19 percent to C$12.6 million from C$15.5 million a year earlier, while revenues slipped to C$20.7 million from C$21.9 million on lower trading volumes.

In an April 21 research note, Dundee Securities analyst John Aiken said that looking ahead, one of the “critical factors” that will shape the near-term success of the combined TSX-MXX entity, to be known as TMX Group, will be its ability to cut costs.

“We believe that there is room for improvement at both exchanges, however, we do not anticipate huge steps forward in the interim until the merger is finalized,” Aiken said.

$1=$1.02 Canadian Reporting by Lynne Olver; Editing by Peter Galloway

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