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
By  Bloomberg
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

NASAA moves to let state RIAs use client testimonials, aligning with SEC rule
NASAA moves to let state RIAs use client testimonials, aligning with SEC rule

A new proposal could end the ban on promoting client reviews in states like California and Connecticut, giving state-registered advisors a level playing field with their SEC-registered peers.

Could 401(k) plan participants gain from guided personalization?
Could 401(k) plan participants gain from guided personalization?

Morningstar research data show improved retirement trajectories for self-directors and allocators placed in managed accounts.

UBS sees a net loss of 111 financial advisors in the Americas during the second quarter
UBS sees a net loss of 111 financial advisors in the Americas during the second quarter

Some in the industry say that more UBS financial advisors this year will be heading for the exits.

JPMorgan reopens fight with fintechs, crypto over fees for customer data
JPMorgan reopens fight with fintechs, crypto over fees for customer data

The Wall Street giant has blasted data middlemen as digital freeloaders, but tech firms and consumer advocates are pushing back.

The average retiree is facing $173K in health care costs, Fidelity says
The average retiree is facing $173K in health care costs, Fidelity says

Research reveals a 4% year-on-year increase in expenses that one in five Americans, including one-quarter of Gen Xers, say they have not planned for.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.