Knight Capital 3Q Profit Falls, Shares Follow

JERSEY CITY, N.J. (AP) — Knight Capital Group Inc. said Wednesday its third-quarter profit fell 19 percent even though revenue was up as the trading firm's margins shrank amid higher execution and clearing costs.

The quarterly profit results fell short of a consensus estimate from analysts polled by Thomson Reuters, and the company's shares dropped $3.39, or 15.6 percent, to $18.40 in afternoon trading.

Jersey City-based Knight earned $29.2 million, or 31 cents per share, in the quarter that ended Sept. 30. That compares to the $36.3 million, or 40 cents per share, it earned a year earlier.

Adjusted profit was a penny higher at 32 cents per share, but it still missed a 39 cent per share forecast from analysts.

Revenue rose 25 percent to $299.9 million from $240.8 million. Analysts had expected $281.7 million.

Knight's global markets segment saw its pre-tax margins fall to 20 percent in the third quarter of 2009 from 35 percent in the year-ago quarter.

CEO Thomas Joyce said the margins were lower due to the profile of the company's order flow and increased execution and clearing costs.

"In addition, we continued to invest in new talent, products and services, asset classes and global expansion," he said in a statement.