BGC Partners posts record earnings in Q1 2015


BGC Partners, Inc. (NASDAQ:BGCP), a global brokerage company servicing the financial and real estate markets, has just posted its financial metrics for the first three months of 2015. The results include those of GFI Group Inc. (OTCMKTS:GFIG), with the metrics consolidated from March 2, 2015.

We kick off the metrics review with what is usually in our focus – the Forex business of the group. This part of the financial services segment of BGC Partners recorded revenues for distributable earnings of $72.9 million in the quarter to March 31, 2015, which is whooping 40.1% higher than the result recorded in the first quarter of 2014.

The robust result reflected the overall solid performance of the financial services operations of the group in the quarter – total revenues for distributable earnings from this segment amounted to $355.7 million in the first quarter of 2015, up by 23.9% from the result reported in the first quarter of 2014. Had it not been for the strong US dollar, the quarterly revenues of this segment would have been $20 million higher.

Let’s examine the results of the entire business now.

  • Post-tax distributable earnings for the first quarter of 2015 amounted to $62 million, up by 32% from a year earlier and making the three-month period the third quarter in a row in terms of profits for BGC.
  • Revenues for distributable earnings also staged a robust rise – they reached $563.9 million, up by 26.5% from the first quarter of 2014.
  • BGC Partners’ Board of Directors declared a quarterly cash dividend of $0.14 per share payable on May 29, 2015 to Class A and Class B common stockholders of record as of May 15, 2015. The ex-dividend date will be May 13, 2015.

Howard W. Lutnick, Chairman and Chief Executive Officer of BGC attributed the successful results “mainly to the remarkable success our brokers have had in converting voice and hybrid Financial Services desks to much more profitable fully electronic trading.”

bgc_gfi_insideGFI deal

On April 28, 2015, a subsidiary of BGC purchased from GFI approximately 43.0 million newly issued shares of GFI’s common stock (the “New Shares”) at that date’s closing price of $5.81 per share, for an aggregate purchase price of $250 million.

Commenting on GFI’s deal, Lutnick noted:

Our results also include those of GFI for one month. Although BGC owned approximately 56 percent of GFI’s outstanding common shares at the end of the first quarter, the Company now owns more than two-thirds of GFI’s outstanding common shares. We therefore control timing and process with respect to a full merger. While the front office operations of GFI and BGC will remain separately branded, we have already begun integrating the support functions, technology, and infrastructure of these two companies.”

Q2 2015 outlook

(compared with Q2 2014)

BGC Partners was optimistic about the second quarter of 2015.

* The Company forecasts distributable earnings revenues to rise by between approximately 51% and 58% and to be between approximately $650 million and $680 million, compared with $430.3 million a year earlier.

* BGC Partners expects pre-tax distributable earnings to increase by between approximately 32% and 51% and to be in the range of $70 million to $80 million, versus $53.0 million in the second quarter of 2014.

To view the official announcement on the corporate results, click here.

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BGC Partners posts record earnings in Q1 2015

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