BGC Partners Revises Q4 2015 Outlook Post GFI and Trayport Deals

BGC expects to pay a net tax rate of 10 percent or less with respect to the $650 million Trayport

BGC Partners (NASDAQ: BGCP), a global brokerage servicing the financial and real estate markets, today announced that it has updated its outlook for the quarter ending December 31, 2015. The results will include the consolidation of GFI Group, a provider of trading technologies and support services to the OTC and listed markets which the brokerage acquired in February.

BGC says it expects its quarterly revenues for distributable earnings to be above the low-end of the range of its previously stated guidance and for its pre-tax distributable earnings to be towards the mid-point. The explanation for this is that the updated outlook reflects the addition of GFI and strong double-digit year-on-year growth for the Real Estate Services business. BGC’s previous outlook had assumed a full quarter of revenues and profits from Trayport, which was sold to ICE earlier this month.

Original Q4 2015 Outlook Compared with Q4 2014 Results

  • BGC anticipated distributable earnings revenues to increase by between approximately 33 percent and 41 percent and to be between $685 million to $725 million, compared with $515.5 million.
  • The outlook for revenues would have been approximately $16 million higher but for the relative strengthening of the U.S. dollar compared with a year earlier.
  • BGC expected pre-tax distributable earnings to increase by between approximately 17 percent and 38 percent and to be in the range of $85 million to $100 million, versus $72.6 million.
  • BGC anticipated its effective tax rate for distributable earnings to remain approximately 15 percent.

Changes

BGC expects to pay a net tax rate of 10 percent or less with respect to the $650 million Trayport transaction, compared with the previous estimate of 15 percent or less. With respect to BGC’s consolidated quarterly results, approximately 33 percent of GFI’s post-tax distributable earnings are expected to be attributable to non-controlling interest in subsidiaries, while the remaining approximately 67 percent are expected to be attributable to BGC’s fully diluted shareholders.

Back in October, BGC reported robust performance in Q3 2015 with net earnings of $58.5 million for the third quarter of the year, a whopping 444.6 percent annual increase. Revenues for the period reached $685.3 million, up a healthy 57.1 percent.

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