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BGC Partners Updates 2018 Post-Spin Outlook

BGC Partners Inc. (BGCP) announced that it had updated its outlook for full year 2018. This outlook excludes the results of its former subsidiary Newmark Group Inc. (NMRK), as all the shares of Newmark held by the Company were spun off to stockholders of BGC on November 30, 2018.

BGC expects its post-spin results excluding Newmark for the full-year 2018 to be around the midpoint of its previously stated outlook for revenues and pre-tax Adjusted Earnings for the full-year 2018.

Previously, the company expected post-spin BGC revenues for the full year 2018 to increase by between 9.5 and 11.5 percent year-on-year, compared to $1.8 billion in 2017.

BGC anticipated 2018 pre-tax post-spin BGC Adjusted Earnings to grow by between 29.5 and 33.5 percent, compared to $299.6 million in 2017.

For the fourth quarter of 2018, the Company expected post-spin BGC revenues of between $445 million and $475 million, an increase of between 3 and 10 percent compared to $432 million in the fourth quarter of 2017.

BGC anticipated pre-tax post-spin BGC Adjusted Earnings of between $80 million and $92 million in the fourth quarter of 2018, an increase of between 38 and 59 percent compared to $57.9 million in the fourth quarter of 2017.

Given BGC's expectation of earnings growth and historical dividend policy of paying out at least 75 percent of post-tax Adjusted Earnings per share, post-spin BGC expects to pay a dividend of approximately 14 cents per share for the fourth quarter of 2018. The Company expects to maintain its post-spin quarterly dividend of 14 cents per share in 2019.

The company noted that it is considering a reverse stock split of BGC common stock, units, and other share equivalents in the first quarter of 2019, subject to Board approval, at a yet to be determined ratio.

Separately, Newmark Group Inc. (NMRK) updated its outlook with respect to its financial results for the year ending December 31, 2018.

Newmark expects its results for the full-year 2018 to be around the high-end of its previously stated outlook for revenues, Adjusted Earnings per share, and Adjusted EBITDA.

Previously, Newmark expected to produce 2018 revenues of between approximately $1.975 billion and $2.025 billion, which would represent an increase of between 24 percent and 27 percent compared with $1.597 billion in 2017.

Newmark expected 2018 post-tax Adjusted Earnings per share to be in the range of approximately $1.45 and $1.53, or an increase of between 26 percent and 33 percent versus $1.15 in 2017.

The company anticipated Adjusted EBITDA to be between $518 million and $538 million, or an increase of 39 to 44 percent compared with approximately $374 million in 2017.

Newmark anticipated its 2018 tax rate for Adjusted Earnings to be in the range of approximately 12 percent and 14 percent, compared with 18 percent in 2017.

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