INTL FCStone Reports Mixed Q4 but Strong 2018 Fiscal Year

The firm achieved record operating revenues for all of its business segments in its 2018 fiscal year.

INTL FCStone, a global provider of financial services, announced its financial results on Monday for the fourth quarter ended September 30, 2018, of its 2018 fiscal year. Taking a look at the results, the firm had a sluggish fourth quarter, but overall, a solid 2018 fiscal year.

Specifically, when taking a look at the company’s whole fiscal year, INTL FCStone managed to achieve record annual operating revenues for all of its business segments, with the annual operating revenue for 2018 coming in at $975.8 million, which is an increase of 24 percent.

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For the fourth quarter, however, the results weren’t so peachy, with total revenues at $6.1 billion. When measured against the three months ended September 30, 2017, which had total revenues of $12.4 billion, this is down by 51 percent.

Sean O'Connor, INTL FCStone CEO
Sean O’Connor
Source: INTL FCStone

Commenting on the results, Sean O’Connor, the CEO of INTL FCStone Inc., said: “Fiscal 2018, was a record year for us with operating revenues approaching $1.0 billion, up 24% and pre-tax income exceeding $100 million for the first time. Every segment of our business achieved record annual operating revenues.

“We were able to realize operating leverage by holding our fixed expense growth to 6% while significantly growing both volumes and operating revenues. This strong growth was indicative both of more favorable market conditions as well as market share gains across our platforms.”

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INTL FCStone sees drop in FX Prime Brokerage revenues

INTL FCStone operates, what it believes to be one of the largest non-bank prime brokers and swap dealers in the world. Through this business, the firm provides prime brokerage foreign exchange (forex) to institutions and professional traders.

During the fourth quarter, operating revenues dropped by 23 percent year-on-year due to a decline in volumes. In Q4, the trading volume for the FX prime brokerage was $70.9 billion. When comparing this to the same period in the previous year, which recorded a volume of $133.8 billion, this is down by 47 percent.

When taking a look at the 2018 fiscal year, unfortunately, the grass doesn’t look much greener, with total volumes falling by 35 percent from $620.9 billion in 2017 to $401.1 billion in 2018.

Taking a look at the company’s securities business unit, where INTL FCStone acts as an institutional dealer for fixed income securities, the segment does provide some hope. During the fourth quarter, operating revenues jumped by 31 percent to reach $47.8 million, compared to $36.4 million in the previous year.

INTL FCStone also provides physical commodity over-the-counter (OTC) trading as well as clearing, hedging and a number of other services.

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