Gain Capital Holdings Earnings: Here’s Why the Stock is Rising Now

Gain Capital Holdings Inc (NYSE:GCAP) delivered a profit and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are down 1.08%.

Gain Capital Holdings Inc Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 238.46% to $0.44 in the quarter versus EPS of $0.13 in the year-earlier quarter.

Revenue: Rose 58.97% to $73 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Gain Capital Holdings Inc reported adjusted EPS income of $0.44 per share. By that measure, the company beat the mean analyst estimate of $0.17. It beat the average revenue estimate of $54.71 million.

Quoting Management: “GAIN Capital’s strong results in the second quarter of 2013 demonstrate the significant operating leverage inherent in our business model. Amid more favorable market conditions, net revenues increased 59.7%, while EBITDA rose threefold; EBITDA margin reached 36.8%,” said Glenn Stevens, CEO of GAIN Capital. “Our commission-based businesses generated $14.2 million of net revenue, and represented 19.5% of the total net revenues, compared with just 9.4% of total net revenues in the second quarter of last year. This demonstrates our continued success in augmenting GAIN’s core retail OTC trading business with fee-based revenue derived from our growing institutional and futures businesses.”

Key Stats (on next page)…

Revenue increased 46.38% from $49.87 million in the previous quarter. EPS increased 300% from $0.11 in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $0.1 to a profit $0.12. For the current year, the average estimate has moved up from a profit of $0.41 to a profit of $0.51 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)