Knight Capital's profits plunge

Knight Capital Group Inc. posted a 35% drop in first-quarter profits on lower revenues and a loss from discontinued operations, falling short of analysts estimates.
APR 18, 2007
Knight Capital Group Inc. posted a 35% drop in first-quarter profits on lower revenues and a loss from discontinued operations, falling short of analysts estimates. The Jersey City, N.J.-based financial services firm posted net income of $31.9 million, or 31 cents per share, down from $49.1 million, or 47 cents per share in the year-ago period. Revenues for the quarter slid 13% to $241.7 million, compared to $277.2 million during the first quarter of 2006. Analysts surveyed by Thomson Financial forecasted earnings of 33 cents per share. The results adversely affected by a $1.3 million, or penny per share, loss from discontinued operations due to a regulatory charge related to Knight Financial Products LLC, which the company sold to Citigroup Inc. in 2004. Knight's asset management business, Deephaven Capital Management, generated $60.7 million in asset management fees, compared to $70.5 million in the first quarter of 2006. Deephaven's assets under management reached $3.9 billion as of April 1, compared to $3.1 billion one year earlier. "The overall trading environment was marked by a slight decrease in retail investing during the first three months, but the trend was offset by the presence of professional traders driving more volume," said Thomas M. Joyce, chairman and chief executive of Knight Capital, in a statement. Last week, a NASD hearing panel issued $100,000 in fines against both Kenneth Pasternak, former chief executive of Knight Securities LP, and John Leighton, former head of the firm's institutional sales desk.

Latest News

SEC loses Hester Peirce, deepening a commissioner crisis
SEC loses Hester Peirce, deepening a commissioner crisis

The "Crypto Mom" departure leaves the SEC commission with just two members and no Democratic commissioners on the panel.

Florida B-D, RIA owner pitches bold long-term plan to sell to advisors
Florida B-D, RIA owner pitches bold long-term plan to sell to advisors

IFP Securities’ owner, Bill Hamm, has a long-term plan for the firm and its 279 financial advisors.

Fintech bytes: Vanilla, Wealth.com forge new estate planning partnerships
Fintech bytes: Vanilla, Wealth.com forge new estate planning partnerships

Meanwhile, a Osaic and Envestnet ink a new adaptive wealthtech partnership to better support the firm's 10,000-plus advisors, and RIA-focused VastAdvisor unveils native integrations with leading CRMs.

Fiduciary failure: Ex-advisor who sold practice fined after clients lost millions
Fiduciary failure: Ex-advisor who sold practice fined after clients lost millions

A former Alabama investment advisor and ex-Kestra rep has been permanently barred and penalized after clients he promised to protect got caught in a $2.6 million fraud.

Why the evolution of ETFs is changing the due diligence equation
Why the evolution of ETFs is changing the due diligence equation

As more active strategies get packaged into the ETF wrapper, advisors and investors have to look beyond expense ratios as the benchmark for value.

SPONSORED Are hedge funds the missing ingredient?

Wellington explores how multi strategy hedge funds may enhance diversification

SPONSORED Beyond wealth management: Why the future of advice is becoming more human

As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management