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February 10, 2011 at 01:37 PM
Penson Worldwide Inc. released fourth-quarter 2010 earnings Thursday, revealing a net loss of $3.2 million, or $0.11 per share. Analysts predicted a loss of $0.13 per share on revenue of $76.7 million, according to Thomson Reuters I/B/E/S. The company made $80 million in revenue, a 15% increase from the third quarter.
“We are pleased to report that during the fourth quarter, revenues increased by double digit percentages in all categories,” said Philip Pendergraft, CEO, in a press release. “In addition, Penson Australia achieved profitability, business from the former Ridge correspondents outperformed expectations, and we reduced expenses in key areas. However, we will not be satisfied until we report profitable consolidated results. Based on the fourth quarter, we are headed in the right direction.”
Non-interest revenues increased 15% from the third quarter to $59.8 million; clearing and commission fees increased 13%, though technology revenues fell 11%. Growth is a result of stronger trading volume in equities, options and futures, according to the company. Net interest revenues increased 12% to $20.2 million on a 21% increase in interest-earning average daily balances.
Fourth-quarter expenses remained "virtually level," including $8 million of non-cash items. The company's cost reduction efforts led to a decline in pro-forma compensation expenses to 36% of net revenues, excluding non-operating expenses. Non-operating expenses totaled $1.8 million, and include the effects of litigation and bad debt, severance payments from cuts to the work force, and costs to prepare subsidiaries for the company's technology conversion.
