January 22, 2009 / 12:56 PM / 10 years ago

REFILE-UPDATE 2-Interactive Brokers Q4 profit misses view

(Refiles to add dropped word in the fourth paragraph)

* Q4 earnings misses analysts’ view

* Net revenue marginally above analyst’s view

* Interest income down 66 percent

* Shares drop 10 percent (Adds company spokesperson comment, details, share movement)

Jan 22 (Reuters) - Derivatives trader Interactive Brokers Group Inc IBKR.O reported a 7 percent rise in quarterly profit, but missed analysts’ estimates as net interest income fell 66 percent.

Shares of the company fell 10 percent to $16.49 in early morning trade on Nasdaq.

“High market volumes and volatility again demonstrated the benefits of our automated trading system and integrated real-time risk management,” Chief Executive Thomas Peterffy said in a statement.

Net revenue from the company’s market making business rose 11 percent to $308.8 million, while net revenue from its electronic brokerage business was nearly flat at $118.7 million.

“Given the drop that other people have seen in their brokerage operations, the fact that we were pretty stable, I think is a good thing,” Steven Sanders, senior vice president of product development at Interactive Brokers, told Reuters.

Interactive Brokers is trying to position itself as a broker and increase its market share in the brokerage business.

The company’s electronic-broker segment competes with the broker arm of TradeStation Group Inc TRAD.O and Thinkorswim Group Inc SWIM.O, while its market maker segment competes with a unit of Citigroup (C.N).

The company gets about 72 percent of its revenue from its market-maker division, while the brokerage segment currently contributes about 27 percent to net revenue.

Trading volumes rose 29 percent in the quarter.

Net income for the fourth quarter was $20.3 million, or 49 cents a share, compared with $18.9 million, or 46 cents a share, in the year-ago period.

Analysts expected earnings of 52 cents a share, excluding items, according to Reuters Estimates.

Total net revenue was $429.3 million, marginally below analysts’ estimate of $428.0 million.

Interest income for the quarter was $63.4 million. (Reporting by Sweta Singh in Bangalore; Editing by Anil D’Silva)

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