In the last quarter published, the company's earnings were lower than Zacks consensus estimates. Results were negatively impacted by higher expenses, partially offset by revenue growth.
BGC Partners has an impressive earnings history. It has exceeded Zacks consensus estimate in three of the last four quarters, the average being 8%.
Nevertheless, the company's fourth quarter activities did not encourage analysts. As a result, the consensus estimate of earnings of 16 cents has remained unchanged over the past 30 days.
Factors influencing fourth quarter results
This will be the first quarterly results for BGC Partners after the fallout from Newmark Group, Inc. (NMRK – Free Report) in November 2018. In December, management provided updated forecasts for the fourth quarter and fiscal year 2018.
For the fourth quarter, BGC Partners is forecasting pre-tax adjusted earnings of between $ 80 million and $ 92 million, an increase of 38% to 59% from the prior year. Revenues are expected to be between $ 445 and $ 475 million, up 3 to 10%.
In addition, revenues should be affected by seasonality. The company's results will also be affected by the unexpected market shutdown on December 5, the significant market volatility recorded in the fourth quarter and the strengthening of the dollar.
On a cost basis, although the Company has not established a perspective, we expect an increase in expenses, given the increase in compensation costs and the costs related to the Newmark Group split.
For 2018, the company expects pre-tax adjusted earnings growth of 29.5 to 33.5% and an increase in revenues of 9.5 to 11.5%. In addition, the effective tax on adjusted earnings will be in the range of 11-11.8%.
This is what our quantitative model predicts:
The chances for BGC partners to beat the Zacks consensus estimate in the fourth quarter are low. Indeed, it does not have the right combination of the two key ingredients – a positive earnings ESP and a Zack rank greater than or equal to 3 – to increase the chances of winning.
You can discover the best stock to buy or sell before publishing with our earnings ESP filter.
ESP earnings: The expected profit for BGC partners is 0.00%.
Zacks Rank: BGC Partners currently has a # 5 (strong selling) Zacks ranking, further reducing the predictive power of ESP.
Stocks to consider
Here are some financial stocks that you may want to take into account because, according to our model, they present the right combination of items to show a higher profit this quarter.
Bank of Montreal (BMO – Free Report) will release its results on February 26. The company has a profit EPS of + 0.30% and a rank of 3 for Zacks. You can see. You will find here the complete list of Zacks actions n ° 1 of the current rank (strong purchase).
The Bank of Nova Scotia (SNB – Free Report) is due to release its results on February 26. She has a profit EPS of + 0.89% and a rank of Zacks of 3.
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