"During the second quarter, Instinet continued to position itself for long-term growth and profitability," said Mark Nienstedt, Acting President & CEO, and Chief Financial Officer, Instinet Group Incorporated. "We made significant gains in Nasdaq trading volume. We met our first-half cost-reduction target, and our product development and deployment remained on schedule. In addition, we agreed to acquire Island ECN, a significant transaction which is expected to deliver expanded liquidity and significant cost synergies for the long-term benefit of our customers and shareholders."
Business Summary
- Customers executed 19.2 billion U.S. equity shares through Instinet in the second quarter of 2002 compared with 15.2 billion shares executed in the previous quarter, and 21.4 billion executed in the second quarter of 2001. U.S. equity shares executed during the second quarter of 2002 consisted of 16.1 billion Nasdaq-listed shares and 3.1 billion exchange-listed shares.
- Instinet's share of Nasdaq-listed volume was 13.9% in the second quarter compared to 11.0% in the previous quarter and 15.3% in the second quarter of 2001. Our share of total U.S. equity volume was 8.6% in the second quarter versus 7.2% previously and 10.2% in the year-ago quarter. Instinet's share of total U.S. equity volume grew each month during the second quarter, reaching 9.1% in June. Instinet / 2
- The company met or exceeded its quarterly goals in developing and deploying new front-end trading applications, trading functionality and connectivity upgrades.
- Instinet's fixed income service ceased operations on May 3, resulting in a net decrease in our annual fixed costs of $39 million compared with the previous quarter, and $43 million compared to the second quarter of 2001.
- The company's annualized fixed-cost base relating to continuing operations was $651 million in the second quarter, down $54 million from the previous quarter and $228 million from the year-ago quarter, primarily due to a 31% decline in headcount to 1,559 at quarter-end versus 2,244 (including 132 fixed income personnel) a year ago. (The fixed-cost base excludes non-recurring expenses -- restructuring charges and the cumulative effect of accounting changes -- and variable costs, including soft dollar and commission recapture, brokerage, clearing and exchange fees, and broker-dealer rebates.)
