INTL FCStone Reports Mixed Q4 but Strong 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.

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.

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 Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term 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.”

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 Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term) 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.