What happened
Shares of the financial technology and brokerage company BGC Partners (BGCP +0.00%) 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%.
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.
