Instinet sounds alert, sharpens axe

INSTINET, the electronic share trading network owned by media group Reuters, has warned it faces a first-quarter loss. The Nasdaq-listed business has also doubled its cost-cutting target this year to $120m (£80m).

The warning follows Reuters' decision to cut Instinet's fees to traders in a bid to bolster its lagging share volume. In February Instinet's share volume fell nearly 24% compared with a year earlier.

Analysts were expecting Instinet to record first-quarter profits of 7 cents to 18 cents per share, with a mean estimate of 10 cents. The firm said it would take a restructuring charge of $55m in the first quarter, $30m more than previously planned. The shares dropped 8% to $5.90 in opening trade. They debuted at $14.50 ten months ago.