KCG’s Q4 Earnings Record Yearly Highs in Revenues, EPS

Revenues exploded on a quarterly and yearly basis in Q4, helped by a strong uptick in trading activity.

KCG Holdings (NYSE: KCG), an independent securities firm agency and market-making execution services provider, has reported its financial metrics for Q4 2016, which saw a strong performance across key segments, including its revenues and profitability, according to a KCG filing.

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The strongest segment for KCG was its total revenues, which soared to $580.5 million in Q4 2016 – this justified a strong boost from just $208.5 million in revenues during Q3 2016, or 178.4% QoQ, its highest reading of the year. Across a yearly time interval, the latest figures also notched a strong growth, climbing 119.9% YoY from Q4 2015.

Q4 2016 was subject to one of the most volatile trading periods of the year, which in November saw peak volumes on accounts of the US election. Despite seeing a recent normalization in its overall volumes, KCG’s Q4 trading statistics, with specific regard to equities, were operating at yearly highs.

Trading Revenues Also on the Rise

This was reflected in its trading revenues, which also climbed on a quarterly basis. During Q4 2016, KCG disclosed a figure of $143.4 million, compared to just $113.8 million in Q3 2016, or 26.0% QoQ. The latest readings were marginally lower than its 2015 equivalent however, retreating by -1.7% YoY from $145.9 million in Q4 2015.

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In addition, KCG also recorded a pre-tax gain of $331.0 million, boosted from the sales of shares in Bats in Q4 2016. In terms of its earnings, KCG also reported a strong earnings per share (EPS) of $2.47 in Q4 2016, easily besting its Q3 2016 figure of -$0.13.

According to Daniel Coleman, Chief Executive Officer of KCG, in a recent statement on its financials: “During the fourth quarter, we monetized a longstanding investment in Bats through a swap of substantially all of our stake for all KCG shares and warrants owned by General Atlantic.”

“Our focus on creating value for stockholders enabled KCG to increase tangible book value per share to $18.71 as of the end of 2016. From an operating perspective, revenues in the fourth quarter fell below our expectations reflecting the continuation of a difficult trading environment. However, a rise in revenues on an operating basis from the prior quarter reflects the improved market conditions starting in November,” he added.

At the time of writing, KCG’s shares (NYSE: KCG) are trading up 5.09% Thursday, operating at $14.26.

Executive Appointments

In addition to its earnings report, KCG also added Peter Fisher, Colin Smith, Heather Tookes, and Adrian Weller to its board as directors with immediate effect. Neither Rene M. Kern nor John C. Morris will be seeking reelection at the 2017 Annual Meeting of Stockholders, which will see a revamped board in 2017.

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