Revenue Up, Profit Down for INTL FCStone in FY2017 Second Quarter

INTL FCStone’s net income was lower in the reported period, with a reading of just $11.0 million vs. $14.5 million

INTL FCStone Inc. (NASDAQ:INTL), a provider of diversified financial services across several asset classes and markets, today announced its financial results for the second quarter of the fiscal year ending September 30, 2017, which were characterized by higher revenues and lagging profits.

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One of INTL FCStone’s strongest areas of growth was its total revenues, which were reported at $5.46 billion in Q2 FY 2017, a climb of 49.0 percent year-over-year from $3.7 billion in Q2 FY 2016. In terms of its operating revenues, the group also performed strongly in the second quarter, yielding a figure of $195.8 million, up 18 percent compared to $166.1 million in the same period a year earlier.

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However, INTL FCStone’s net income was lower in the reported period, with a reading of just $11.0 million vs. $14.5 million in Q2 FY 2016, or -24.0 percent on a year-over-year basis. Across the half-year interval, the figure was also weaker when weighed against the year prior, coming in at $17.3 million in the six-month period through March 2017, a loss of 26 percent from $23.3 million in H1 FY 2016.

This weakness extended to the group’s diluted earnings per share (EPS) as the company disclosed the profit metric at $0.58 in Q2 2017, down from $0.76 in Q2 2015, or -24.5 percent year-over-year. The fissure is also below the company’s medium term expectations, but still above net earnings in the previous quarter.

Commenting on the results, Sean M. O’Connor, CEO of INTL FCStone Inc., stated: “Income in all of our segments improved versus the prior year with the exception of our Securities segment which was down 36%, coming off a strong prior year’s quarter, when it saw record results in market making and significant gains out of Argentina.  Commercial Hedging segment net income was up 36% due to improved OTC revenues, Global Payments’ segment income was up 26% on strong volume growth tempered by reduced margins as global and domestic banks increased their flow of smaller payments through us.”

“Our Physical Commodities segment’s income was up 105% due primarily to a 26% increase in the number of ounces of precious metals traded and business expansion in our Physical Ag & Energy businesses.  Clearing and Execution Services segment income grew as a result of increased operating revenues in our Exchange-traded Futures & Options business as well as the acquisition of the Correspondent Clearing, Independent Wealth Management and Derivative Voice Brokerage businesses,” he added.

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