NITE earnings down,but is the time to buy now?
CORRECTED - UPDATE 1-Knight quarterly profits fall on Nasdaq slump
In NEW YORK item, headlined "Knight quarterly profits fall on Nasdaq slump," please read in final paragraph ... compared with proforma net income of $188.5 million, or $1.50 cents per share ... instead of ... compared with proforma net income of $211.3 million, or $1.68 cents per share ... (Corrects year-ago figures).
A corrected repetition follows:
(Adds CEO quotes, details stock trading activity)
By Greg Cresci
NEW YORK, Jan 17 (Reuters) - Knight Trading Group Inc. (NASDAQ:NITE), the No. 1 share dealer on Nasdaq, on Wednesday posted a 44-percent decline in fourth-quarter profit as the Nasdaq stock market slumped and customers invested in less volatile stocks.
The Jersey City, N.J.-based firm, which buys and sells shares for investors and pockets the difference between the bid and ask prices, felt the pinch from a falling Nasdaq and steep drops in the technology shares favored by many of the investors it serves. The Nasdaq Composite Index plunged 33 percent in the quarter.
Overall stock trading volumes reached record levels in the quarter, however, benefiting Knight's trading operations.
Knight shares, which lost 71 percent of their value last year, finished at $19-5/8 on the Nasdaq Tuesday. The stock has a 52-week high of 60-1/16 and a 52-week low of $13-5/16.
"We believe that the market correction kept many self-directed individual investors on the sidelines or in larger cap, defensive stock issues throughout the fourth quarter," Chief Executive Kenneth Pasternak said in a statement. Defensive issues commonly refer to more stable stocks than that of shares in smaller, newer companies.
"This mix of stocks -- for which Knight posts lower revenue capture per share -- negatively impacted our revenue for the quarter," he said.
Knight earned $35.3 million, or 28 cents a share, in the fourth quarter. That was far below its net income of $62.6 million, or 49 cents a share, in the year-ago period.
Revenue came in at $251.3 million, down from $281.7 million last year. Revenue from trading operations comprised $229.1 million of Knight's total revenue for the quarter. The company also had revenue from commissions, asset management fees and investment income.
The fourth-quarter earnings results managed to beat analyst's lowered expectations calling for Knight to 22 cents a share, according to market research firm First Call/Thomson Financial.
Knight, which carries out many of the stock trades investors funnel through the Internet, said it processed an average of about 539,000 trades per day in the quarter.
That was up from an average of 470,000 last year, and higher than the nearly 499,000 trades per day it processed in the third quarter.
Industrywide, Internet trading volumes rose a nominal five percent during the quarter to an average of about 925,000, according to estimates by Chase H&Q analyst Greg Smith.
Knight said it traded 24.8 billion shares in the quarter, compared with 26.0 billion last year and 21.9 billion shares in the third quarter.
For full-year 2000, Knight reported a net income of $259.9 million, or $2.05 per share, on revenue of $1.3 billion. That compared with proforma net income of $188.5 million, or $1.50 cents per share, in the previous year, when revenue totaled $896.6 million. |
