even specialists are having a hard time making money and they are guaranteed the spread and get to see order flow ahead of time. LaBranche Guides Lower, Citing Sleepy Stock Markets By TSC Staff 10/01/2003 08:09 AM EDT Moribund stock-trading volume will result in LaBranche (LAB:NYSE - commentary - research) missing third-quarter earnings estimates by a wide margin, the company said. LaBranche, which operates a specialist firm on the New York Stock Exchange, expects to earn 3 cents to 5 cents a share in the quarter. Analysts surveyed by Thomson First Call were forecasting earnings of 17 cents a share for the period. The company said depressed volume and lower volatility led to the shortfall, particularly as it lowered the need for the company to act as a principal in stock trades. LaBranche said principal trading volume was about $176 billion in the third quarter compared with $247 billion a year earlier and $188 billion in the second quarter of 2003. Principal trading revenue in September were the lowest for any month since October 1999. LaBranche also said an NYSE investigation into the behavior specialists' trading practices is limited to a "very small fraction" of its trading revenue. "While LaBranche takes every transaction seriously, it believes that the activity under review is statistically insignificant relative to its trading volumes," the company said. "LaBranche also believes that the distraction caused by the investigation is disproportionate to its scope and looks forward to its resolution." The shares were recently down 99 cents, or 7%, to $13.16 on the Instinet premarket session.