Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of BGC Partners Rose Today

By Bram Berkowitz - Mar 31, 2021 at 4:41PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The brokerage and financial technology company updated its guidance today for the first quarter.

What happened

Shares of the financial technology and brokerage company BGC Partners (BGCP 2.48%) climbed more than 7% today after the company updated its guidance for the first quarter of the year.

So what

BGC Partners reaffirmed previous guidance it had given earlier this year.

That means the company still expects to generate revenues in the first quarter between $540 million and $590 million, and pre-tax adjusted earnings of $102 million to $122 million. BGC expects its tax rate to be in the range of 10% to 12%.

Line with arrow moving higher.

Image source: Getty Images.

If the company does indeed hit these ranges, then it will report first-quarter revenues below the $603 million it generated in the first quarter of 2020. However, it also means the company has a chance to beat on pre-tax adjusted earnings, with BGC reporting $112.1 million for the first quarter of 2020.

Now what

One thing to understand is that as a broker, BGC benefited from the market volatility at the onset of the pandemic in March of 2020, which led to increased trading and therefore more fees for the company.

BGC noted that toward the end of March in 2020, revenue jumped by more than 25% compared to the same time period in 2019.

So the fact that revenue in the first quarter of 2021 could be within shouting distance of revenue in the first quarter of 2020 is a good sign, especially considering the company has seen its stock price deteriorate in recent years.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

BGC Partners, Inc. Stock Quote
BGC Partners, Inc.
BGCP
$3.30 (2.48%) $0.08

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
344%
 
S&P 500 Returns
120%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.