TMX Group says economic slowdown helped pull revenue down

TORONTO — TMX Group Inc. (TSX:X) says the economic slowdown helped weaken revenues by $9 million and cut net income during the third-quarter, but the CEO behind the operator of Canada’s main stock exchanges believes market conditions are starting to improve.

TORONTO — TMX Group Inc. (TSX:X) says the economic slowdown helped weaken revenues by $9 million and cut net income during the third-quarter, but the CEO behind the operator of Canada’s main stock exchanges believes market conditions are starting to improve.

“We do see encouraging signs in some of our businesses,” chief executive Thomas Kloet told analysts in a conference call Wednesday after the closing bell.

“Our focus on cost remains a priority. At every level, in every business unit, we’re targeting operational efficiency, seeking synergies from acquisitions and striving to limit expenses that are not core to our business.”

Earlier in the day, the company reported that third-quarter earnings were $41.7 million or 56 cents a share, down from $50.9 million or 66 cents a year in the year-ago period.

Revenue for the quarter was $130.2 million, down from $139.2 million.

The company tied the profit decline to lower equity trading revenue on the Toronto Stock Exchange, lower issuer services revenue and investment income, and higher costs for new technology.

Decreases were partially offset by higher revenue from energy trading at its Calgary-based NGX unit, cash markets equity trading revenue on the TSX Venture Exchange and fixed income trading.

TMX Group, which operates exchanges in both Toronto and Montreal, has traditionally had a relatively cushy position in Canada as the country’s only major stock market, but in recent years other companies have been trying to grab a share of the market.

Both Alpha Trading Systems and the Canadian National Stock Exchange have launched systems in recent years, and with them aggressive promotional campaigns to attract companies listed on the TMX exchanges.

While neither system has had a major impact on the TMX, Alpha is considered most worrisome because it’s backed by the big Canadian banks and Thomson Reuters, which means there’s lots of capital available to invest in its growth.

“We are operating in a hyper competitive market, one that requires strategic investments in key parts of the business, particularly in regards to technology,” Kloet said, adding that the TMX is already making those investments.

Kloet downplayed the emergence of new competitors, and their impact on the TMX’s market share.

“I don’t see that as necessarily being competitive because we still have a commercial relationship with respect to our data,” he said.

“To the extent that we allow other parties to licence our data to redistribute, we will do that under a commercial relationship.”

In an earlier earnings statement, Kloet cited the launch of the TSX Quantum gateway, the construction of additional co-location spaces and the expansion of enterprise infrastructure as some of the operator’s future tech plans.

The company also outlined plans to increase the speed and performance of its internal networks, which it expects to have competed by the first quarter of next year, incurring annual operating expenses of about $8 million.

“We estimate these costs will be largely offset by the decommissioning of legacy hardware beginning in the second half of 2010,” it said.

The TMX Group has faced several technical problems over the past year, which has caused outages of the stock market trading platform.

The most recent glitch happened in May, and Kloet later explained it was “a memory consumption issue” that the company was going to further investigate.

Also on Wednesday, the TMX board of directors declared a dividend of 38 cents a share on each common share outstanding, payable Nov. 27 to shareholders of record at the close of business on Nov. 13.

TMX Group shares closed the session down six per cent, or $1.94, to $30 on the Toronto Stock Exchange.

Just Posted

Men posing as repo men attempt to steal vehicle in Red Deer County

Two men attempted to steal a utility vehicle from a Red Deer… Continue reading

Red Deerian spreads kindness with one card at a time

One Red Deerian wants to combat bullying by spreading kindness in the… Continue reading

Bowden baby in need of surgery

“Help for Alexis” Go Fund Me account

PHOTO: First Rider bus safety in Red Deer

Central Alberta students learned bus safety in the Notre Dame High School… Continue reading

WATCH: Annual Family Picnic at Central Spray and Play

Blue Grass Sod Farms Ltd. held the Annual Family Picnic at the… Continue reading

Woman has finger ripped off at West Edmonton Mall waterslide

SASKATOON — A Saskatchewan woman says she lost a finger after her… Continue reading

Uncertainty looms over Canada’s cannabis tourism, but ambitions are high

TORONTO — Longtime marijuana advocate Neev Tapiero is ready for the cannabis-driven… Continue reading

Feds mulling safeguards to prevent ‘surge’ of cheap steel imports into Canada

OTTAWA — The federal government extended an olive branch of sorts to… Continue reading

Ontario govt caps off summer session by passing bill to cut Toronto council size

TORONTO — The Ontario government passed a controversial bill to slash the… Continue reading

Updated:Italian bridge collapse sends cars plunging, killing 26

MILAN — A 51-year-old highway bridge in the Italian port city of… Continue reading

Saudi Arabia spat affecting Canadians embarking on hajj, community members say

TORONTO — Members of Canada’s Muslim community say recent tensions between Ottawa… Continue reading

Tug carrying up to 22,000 litres of fuel capsizes in Fraser River off Vancouver

VANCOUVER — The smell of diesel filled the air as crews worked… Continue reading

Nebraska executes first inmate using fentanyl

LINCOLN, Neb. — Nebraska carried out its first execution in more than… Continue reading

Most Read


Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month