INTL FCStone’s Q1 2017 Revenues Spike as EPS Weighs

Revenues performed well on a QoQ and YoY basis, though EPS and net income were firmly lower.

INTL FCStone Inc. (NASDAQ:INTL), a global financial services group, has released its operating metrics for the fiscal year ending December 31, 2016, showing a strong uptick in revenues relative to last year. However, the group’s EPS and net income were pointed firmly lower over the same period.

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During Q1 FY2017, INTL FCStone reported its total revenues of just $6.07 billion, which represents a growth of 118.3 percent quarter-over-quarter from $2.78 billion in Q4 2016. Comparing the latest filing to the previous fiscal year, revenues in Q1 2017 showed an increase of 79.0 percent year-over-year from $3.4 billion in Q1 2016.

Operating revenues also performed strongly in Q1 FY2017, yielding a figure of $185.5 million, climbing 3.9 percent quarter-over-quarter from $178.6 million in Q4 2016. This growth was higher when measured against the prior year, surging 22.6 percent year-over-year from $151.3 million in Q1 2016.

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The latest quarter featured one of the most volatile trading periods of the entire year, which included the US election as well as its surprise outcome and ensuing volatility that drove markets to record activity.

In addition, INTL FCStone’s net income was also much lower in Q1 FY2017, with a reading of just $6.3 million vs. $16.8 million in Q4 2016, or -62.5 percent quarter-over-quarter. This compared to a decline of -28.0% on a year-over-year basis from $8.8 million in Q1 2016. One of the reasons for this performance was the group’s interest rate strategy and purchases of treasury notes.

Earnings Continue Decline

Shareholders of INTL FCStone also saw a diminishing performance in the first quarter of 2017, as the company disclosed a diluted earnings per share of $0.34, down from $0.46 in Q1 2016, or -26.1 percent year-over-year.

According to Sean M. O’Connor, Chief Executive Officer of INTL FCStone Inc, in a recent statement on the metrics: “While the acquired businesses were additive to our segment income, when related overhead costs associated with these businesses are considered, we recognized a modest net loss for the current quarter for the businesses acquired.”

“We believe that market conditions continue to be generally favorable for our business with increased volatility in financial markets, prospects of rising interest rates and a possible easing of the regulatory burden,” he added.

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