Thursday, commodity risk management firm FCStone Group, Inc. (FCSX) reported a loss for the third quarter, compared to a profit last year, reflecting some exceptional charges. On an adjusted basis, net income declined from the prior year on lower revenues that reflected lower exchange-traded and OTC contract trading volumes, primarily from customers within the agricultural, financial and energy markets.
Net loss for the quarter was $8.08 million or $0.29 per share compared to a net income of $8.01 million or $0.28 per share in the previous year.
Net loss from continuing operations for the third quarter was $8.08 million or $0.29 per share compared to a net income of $8.37 million or $0.29 per share in the same quarter of the previous year.
Results include a final bad debt provision of $3.5 million, higher professional fees and expenses of $1.3 million, severance charges of $1.3 million and a $2.4 million loss from the company's minority investment in grain merchandiser FGDI, Llc.
Excluding items, net income for the quarter declined to $0.5 million or $0.02 per share.
On average, five analysts surveyed by Thomson Reuters expected the company to report loss or $0.09 per share for the third quarter. Analysts' estimates typically exclude special items.
Total revenues for the quarter declined to $57.46 million from $83.59 million last year. Two analysts had consensus revenue estimate of $51.81 million for the company.
Segment wise, revenue from Commodity and Risk Management Services declined to $21.9 million from $44.4 million. Revenue from Clearing and Execution Services segment declined to $22.0 million from $36.5 million. Financial Services segment reported revenues of $0.5 million compared to $2.4 million in the prior-year quarter.
The company noted that its third quarter revenues reflect continued challenges in the market including reduced credit capacity, fewer market participants, and low short-term interest rates as compared to the year ago period.
For the nine months ended May 31, 2009, net loss was $61.27 million or $2.19 per share compared to a net income of $33.21million or $1.15 per share. Total revenues declined to $199.66 million from $249.27 million.
Looking forward Pete Anderson, president and chief executive officer of FCStone said, "While the market challenges affecting credit availability and interest rates will persist near term, we are seeing initial signs of recovery in the energy and agriculture markets."
FCSX is currently trading at $4.02, up 5.24% on the Nasdaq.
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