Canaccord Capital Inc. turned a profit in the fourth quarter after trimming costs, the independent investment dealer said Wednesday.

However the company posted a $47.7 million loss for the year after writing down asset-backed commercial paper and goodwill.

Canaccord said net income for the fourth quarter ended March 31 was $3.8 million, or 7¢ a share, down from $7.2 million, or 15¢ a share, a year earlier.

Revenue fell 25.4% to $107 million from $143.4 million in the final quarter of 2008.

Quarterly expenses were $100.2 million, down 24% from $131.6 million a year ago, thanks the company’s extensive cost-cutting efforts in recent months.

“That’s a number we’re pleased with, but we expect to lower it even further as we continue to realize the savings of the expense reduction strategies implemented over the last several quarters,” Canaccord president and CEO Paul Reynolds said in a conference call on Wednesday.

He expects that the cost control program will result in a total of $35 million in annualized savings, which will be fully realized over the next two to three quarters. The cuts have been spread out through the entire organization, Reynolds said.

“It’s come out of every single department and every single geography.”

The expense reduction strategy is part of a broader goal of becoming a leaner and more efficient organization, he added.

“Cost control is an essential element of ensuring we can generate sustainable returns in any market environment,” Reynolds said.

Return on equity for the fourth quarter was of 4%, up from -37.8% in the year-earlier period.

Assets under management fell to $393 million in the fourth quarter, down 46.2% from $730 million in the comparable year-earlier period.

Canaccord said its board had decided to continue the suspension of its dividend to “enable Canaccord to preserve its working capital and book value, as well as to position the company to take advantage of growth opportunities that may become available.”

The net loss for the year ending March 31 was $47.7 million, or 97¢ per diluted share.

Canaccord said its annual results included significant items related to adjustments related to its exposure to asset-backed commercial paper, impairment of goodwill and intangibles and restructuring costs.

Excluding significant items, net loss for the year was $1.4 million, or 3¢ a share, compared with net income of $79.3 million, or $1.63 a share, in fiscal 2008.

In the months to come, Canaccord is placing a particular focus on enhancing its product and client services division, Reynolds said in the conference call.

“We are excited about the progress we’re making towards improving the quality of our client services,” he said.

Reynolds noted that the company’s recent decision to let go of 75 underperforming investment advisors was a key part of this plan.

“This was an important step in our client-focused quality improvement strategy,” he said, emphasizing that the layoffs were not made for cost-cutting purposes. Since the firm intends to retain all the assets and clients of the departing advisors, the move will not impact its revenue or assets under administration, Reynolds said.

He added that the layoffs allow the firm to focus its resources on its most productive brokers, and free up capacity for recruiting new advisors with deeper expertise.

IE