NEW YORK – Instinet Group Inc., which runs the world's No. 1 alternative stock trading network, on Monday said its third-quarter profits would be sharply lower than expected as trading volume was hurt by the shutdown of U.S. stock markets after the Sept. 11 attacks.
Instinet, a majority-owned unit of global news and information company Reuters Group Plc, said the four-day trading hiatus after the attacks on the World Trade Center and Pentagon lowered earnings by about $18 million, or 4 cents per share. It now expects third-quarter earnings of 7 cents to 9 cents per share. The forecast excludes a $25 million restructuring charge announced in July.
Analysts had been looking for earnings of 4 cents to 18 cents per share, with a mean forecast of 12 cents per share, according to research firm Thomson Financial/First Call.
``Going forward, we believe that Instinet's market leadership and strong balance sheet will enable us to overcome any short-term challenges and continue to provide innovative trading and independent research services to our global client base,'' Instinet Chief Executive Douglas Atkin said in a statement.
Declining trading volumes had been hurting Instinet throughout the summer but the company said it had seen a spike in trading activity in September.
Instinet said daily trading volume dipped slightly in August, with 5.04 billion shares changing hands on its systems during the month. A year ago, 5.06 billion shares changed hands on its network during the month.
Rival share dealers such as Knight Trading Group Inc. and LaBranche & Co. Inc. have also seen eroding profits in the face of the prolonged stock market slump and a weakening U.S. economy.
Shares of Instinet, which went public with a $464 million stock offering in May, closed Friday at $10.27 on the Nasdaq but had dipped to $10.15 in pre-market trading on Monday.