Broker MF Global Suffers Dreadful Quarter

It was a morning of reckoning for MF Global(MF Quote) today as the company announced the results from its fourth-quarter report card. The verdict was clear: revenue was down and losses grew. Call it a C-minus.

The futures and options broker reported a net loss of $111.7 million. After including a $7.7 million preferred divided payment, the loss came to 98 cents a share, as compared to a loss of $83.1 million, or 69 cents, at the same time last year.

MF Global also took a non-cash impairment expense of $82 million, citing "reflection of the impact of the current economic conditions and the decline in the company's market capitalization" in a release. The company's adjusted net loss for the quarter came in at 5 cents per share, though adding back $8 million in litigation expenses and $13.6 million in restructuring costs brought EPS to 4 cents. Thomson Reuters polling had put the street consensus at a profit of 7 cents per share.

The hits kept on coming though, as the company also announced that revenue slumped to $256.7 million, down from $407.9 million year-over-year, and falling well short of street predictions of around $300 million.

"This has been a year of change and transformation for MF Global, and we believe our focus on continuous improvement has strongly positioned the company for the future," Bernard W. Dan, CEO of MF Global, said in a release this morning.

The loss of revenue was attributed to a heavy drop in volume and commissions. Revenue from cleared commissions fell to $237.8 million from $439.6 million in the year before. Execution-only commissions fell to $75.1 million from $131.3 million year over year. Exchange-traded volumes fell to 386.2 million contracts, and execution-only volumes plummeted to 113.7 million contracts. That's compared to 155.7 million last year. Because of a zeroing of global interest rates, MF Global's interest income dropped in kind more than 84%.