Close Close
Sign In
Newsletters
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
Podcast Center Video Center Webcasts Resource Center Events
About ThinkAdvisor Contact Us Advertise With Us Asset & Logo Licensing Sitemap Terms of Service Privacy Policy Copyright © 2024 ALM Global, LLC. All Rights Reserved.
ThinkAdvisor

Industry Spotlight > Broker Dealers

Penson Misses Earnings Due to Expenses, Weak Trading

By Janet Levaux

X
Your article was successfully shared with the contacts you provided.

Penson Worldwide (PNSN) reported net revenues of $71.11 million and a net loss of $7.4 million, or $0.29 per share, for the second quarter ended June 30, including $7.6 million in certain pre-tax expenses (or $0.26 a share) related to the June 25 purchase of 95 clearing contracts from Ridge Clearing & Outsourcing Solutions.

Analysts had expected the company – which released second-quarter earnings after the markets had closed on July 22 — to have earnings of $0.06 a share on sales of $71.13 million.

After the Ridge acquisition, Penson said that it is the second-largest clearing firm based on correspondent count.

Other one-time charges in the quarter were related to the signing of an 11-year outsourcing agreement with Broadridge Financial Solutions and from severance tied to reducing Penson’s overhead, which aims “to push annual savings to the high end of the previously announced $7 million-$10 million range,” the company said in a press release.

Penson said that, excluding these expenses, operating results were also affected by lower than expected trading volumes industrywide in June and other conditions.

“This was a transition quarter in many ways,” explained CEO Philip A. Pendergraft in a statement. “We completed the transaction with Broadridge, which will both expand our revenues and lower our existing cost base, but also resulted in a number of one-time costs this quarter.”

Penson had 385 revenue-generating correspondents at June 30, 2010, compared to 297 at March 31, 2010. Ridge added 95; Penson GHCO futures operations added two, for a total of 58; and Penson securities clearing operations reduced its count by 9, for a total of 232, according to the company.

As of June 30, 2010, there was a pipeline of 24 new correspondents, Penson said.

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.