, the largest publicly traded specialist firm, reported a fourth-quarter loss Wednesday, due mainly to a $170 million goodwill writedown on the value of several past acquisitions.
The fourth-quarter loss put a cap on what has been an awful year for LaBranche, which is one of five specialist firms likely to be fined and sanctioned by securities regulators for trading violations. The trading firm has also seen its stock price cut in half over the past year.
In the quarter, the firm lost $157 million, or $2.62 cents a share, compared with a profit of $21.7 million, or 36 cents a share, a year earlier. The fourth-quarter numbers resulted in a full-year net loss of $139.6 million, or $2.34 share, compared with a gain of $80.3 million, or $1.34 a share, a year earlier.
Excluding the goodwill write-down, LaBranche, on an operating basis, earned $4.2 million, or 7 cents a share. On that basis, LaBranche's earnings exceed analyst expectations by a penny, according to Thomson Financial First Call.
But with all the trouble LaBranche is facing on the regulatory front, investors all but ignored the operating earnings. Recently, shares of LaBranche were down 2 cents, to $10.67 a share.
Revenue slid 37% from a year ago to $71 million, as LaBranche struggles to find its footing despite the strong rebound in the stock market. Last quarter, the firm stopped paying a dividend until it returns to profitability.
LaBranche last week said the
Securities and Exchange Commission
had notified the firm that regulators are considering bringing a civil enforcement action against it over possible trading infractions. The SEC sent similar notices to other specialist firms, which drive most of the trading on the
New York Stock Exchange
The SEC and the NYSE have been investigating allegations that LaBranche and other specialists violated their responsibilities as specialists by making trades ahead of customer orders.
A few months ago, LaBranche said it expected to be fined and ordered to pay restitution. LaBranche also said the NYSE has told it that improper trading may have cost investors $38.5 million. The NYSE told LaBranche that its investigation had found that the firm enjoyed a "specialist advantage" that enabled it to "trade ahead" of customer orders in certain situations.