BGC Partners posts update on financial forecast for Q1’15

BGC Partners, Inc. (NASDAQ:BGCP), the global brokerage servicing the financial and real estate markets, today published an updated earnings forecast for the first quarter of 2015.

Taking out the results of GFI Group Inc. (NYSE:GFIG), in which BGC Partners recently acquired a majority stake, BGC now forecasts its quarterly revenues for distributable earnings to be towards the low end of the range of the previously stated guidance, and its quarterly pre-tax distributable earnings to be near the mid-point.

Here are the highlights from the previous guidance (out on February 11, 2015):

  • BGC forecast distributable earnings revenues to increase by approximately 10%-17% and to be between approximately $490 million and $520 million in the quarter to March 31, 2015.
  • BGC expected its pre-tax distributable earnings to increase by between approximately 21% and 42% and to be in the range of $68 million to $80 million, compared with $56.2 million.
  • BGC forecast its effective tax rate for distributable earnings to stay unchanged at approximately 15%.

GFI also made an important announcement regarding its financial metrics for the first three months of 2015. We remind you that since BGC now owns approximately 56% of GFI’s common shares, GFI will be a division of BGC. GFI’s financial results will be consolidated with those of BGC starting on March 2, 2015.

GFI is forecast to generate around $60 million in revenues for distributable earnings and to have a pre-tax distributable earnings margin in the range between 3% and 5% for March this year.

Concerning BGC’s consolidated results, about 44% of GFI’s post-tax distributable earnings are expected to be attributable to noncontrolling interest in subsidiaries, while the remaining 56% are estimated to be attributable to BGC’s post-tax distributable earnings to fully diluted shareholders.

In addition, BGC today announced that Cantor Fitzgerald plans to make use of its right to convert BGC’s $150 million of 8.75% convertible senior notes, due April 15, 2015, into approximately 24 million units and/or common shares by their due date. This operation will have no effect on the BGC’s fully diluted share count for distributable earnings, the company says.

The conversion is expected to cut BGC’s pre-tax interest expenses by $13.1 million on an annualized basis and to diminish the amount of debt on its balance sheet by $150 million.

To view the official announcement by BGC, click here.

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