Investment dealer GMP Capital Inc. (TSE: GMP) reported a 79% drop in second-quarter profit, hurt by lower levels of underwriting activity and reduced trading volumes.
Revenue slipped 41% to $67.6 million for the second-quarter that ended June 30. This compares with $114.7 million in the same period last year.
Net income logged in at $5.1 million, or 4 cents per diluted share, down from $24.1 million, or 32 cents per diluted share, one year ago.
The company attributes the declines to lower underwriting activity and challenging business conditions in the Canadian mid-market.
Analysts, on average, had expected GMP to earn 19 cents, on revenues of $83.1 million, according to Bloomberg.
"In our capital markets business, revenue was lower than our expectations and was negatively impacted by reduced investor confidence and declining equity market valuations, Harris Fricker Chief Executive said in a statement.
The company, which is a peer of Canaccord Genuity, said sales at its Richardson GMP segment rose 18% to $39.5 million due to higher commission sales on account of increased client trading activity as well as higher investment management fees.
GMP Capital, along with Desjardins Financial Group, Dundee Capital Markets and Manulife Financial, has agreed to join Maple's $3.8 billion bid for the TMX Group.
GMP’s shares were inactive during Friday’s pre-market trade, holding at $10.65 on the Toronto Stock Exchange.