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Jun 30, 2020
StoneX Q3 2020 Earnings Report
Achieved significant growth in net income and operating revenues, driven by increased customer demand and market volatility.
Key Takeaways
StoneX Group Inc. reported a strong Q3 2020 with a 14% increase in operating revenues to $322.6 million and a 125% increase in net income to $36.6 million, resulting in a diluted EPS of $1.87 and an ROE of 21.9%. The results reflect the company's ability to navigate unprecedented market volatility and capitalize on opportunities in equity and debt capital markets, as well as precious metals.
Operating revenues increased by 14% to $322.6 million, driven by growth in securities and physical commodities segments.
Net income increased by 125% to $36.6 million, reflecting improved profitability.
Diluted earnings per share (EPS) reached $1.87, indicating strong financial performance.
The company closed the acquisition of Gain Capital Holdings, Inc. after the quarter end.
StoneX
StoneX
StoneX Revenue by Segment
Revenue by Segment
Eliminations Revenue
CapyFin.com Forward Guidance
StoneX anticipates headwinds from continued low short-term interest rates, but expects these to be offset by heightened volatility and the opportunity to increase market share as the industry consolidates. They also anticipate that the acquisition of Gain Capital Holdings, Inc. will be accretive both financially and strategically.
Positive Outlook
- Closing of the acquisition of Gain Capital Holdings, Inc.
- Expectation that the Gain acquisition will be accretive financially and strategically.
- Potential offsets to low short-term interest rates from heightened volatility.
- Opportunity to increase market share as the industry continues to consolidate.
- Strong revenue growth in Equity and Debt Capital Markets
Challenges Ahead
- Headwinds relating to continued low short-term interest rates.
- Decline in Commercial Hedging revenues due to weather-related volatility in prior year.
- Decline in Global Payments revenues due to global economic slowdown impact of COVID-19 pandemic
- Decline in Asset Management revenues due to difficult market conditions in Argentina
- Decline in Clearing and Execution Services revenues due to lower short-term interest rates