Knight Capital Group Inc. (NYSE:KCG) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company.
Knight Capital Group Inc. Earnings Cheat Sheet
Results: Adjusted Earnings Per Share decreased 83.33% to $0.06 in the quarter versus EPS of $0.36 in the year-earlier quarter.
Revenue: Decreased 18.29% to $285.2 million from the year-earlier quarter.
Actual vs. Wall St. Expectations: Knight Capital Group Inc. reported adjusted EPS income of $0.06 per share. By that measure, the company beat the mean analyst estimate of $0.04. It missed the average revenue estimate of $312.38 million.
Quoting Management: “In the first quarter of 2013, Knight’s teams proved determined and our core competencies resilient,” said Thomas M. Joyce, Chairman and Chief Executive Officer, Knight Capital Group. “Knight’s comeback from the August 1st technology issue remains impressive. During the first quarter, revenues from continuing operations were strong despite a decline in consolidated U.S. equity volume year over year and the lowest quarterly market volatility in more than five years. Knight combined the full service and electronic institutional equities sales teams, announced the sale of institutional fixed income, and merged the Institutional Sales and Trading and Electronic Execution Services reporting segments. At the same time, the firm was engaged in planning for the announced merger with GETCO.”
Key Stats (on next page)…
Revenue increased 39.05% from $205.11 million in the previous quarter. EPS increased 500% from $0.01 in the previous quarter.
Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $0.06 and has not changed. For the current year, the average estimate has moved down from a profit of $0.22 to a profit of $0.21 over the last ninety days.
Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute – click here and get our CHEAT SHEET stock picks now.
(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)