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Virtu Financial's (VIRT) Q3 Earnings Beat, Increase Y/Y

Virtu Financial Inc's VIRT third-quarter 2020 earnings per share of 81 cents beat the Zacks Consensus Estimate by 8%. Moreover, the bottom line skyrocketed 285.7% year over year.

Revenues of $362 million increased 44.8% year over year, driven by gain on the sale of MATCHNow as well as heightened levels of volatility, bid-ask spreads and trading volumes across global markets and asset classes due to the COVID-19 pandemic. However, the top line missed the consensus mark by 0.3%.

Virtu Financial, Inc. Price, Consensus and EPS Surprise


Quarterly Operational Update

Adjusted trading income of the company surged 45% to $362.3 million year over year.

In the quarter under review, adjusted EBITDA jumped 139.5% to $248.7 million.

Total operating expenses jumped 3.9% year over year to $403 million. This increase was owing to higher brokerage, exchange, clearance fees and payments for order flow.

Segmental Update

Adjusted net trading income from the Marketing Making segment rose 81.5% year over year to $257 million in the quarter under review. In this segment, adjusted net trading income from Global Equities rose 106.4% year over year to $211 million while the same from Global FICC, Options and Other climbed 16% year over year to $45.6 million.

Adjusted net trading income from Execution Services decreased 2.8% year over year to $105 million.

Dividend Update

The company's board of directors declared a quarterly cash dividend of 24 cents per share to be paid out on Dec 15, 2020 to shareholders of record as of Dec 1.

Financial Update

As of Sep 30, 2020, the company had total assets worth $9.4 billion, down 1.7% from the level at 2019 end.

It exited the quarter with total equity of $1.8 billion, up 47% from the level on Dec 31, 2019.

The company exited the third quarter with $567.7 million of cash and cash equivalents, down 22.5% from the 2019-end level.

In the quarter under review, long-term borrowings dropped 14.6% to $1.6 billion from the level at 2019 end.

Zacks Rank and Performance of Other Players

Virtu Financial currently has a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other stocks in the same space that have already reported third-quarter earnings include Mastercard MA and American Express Co. AXP, which missed bottom-line estimates by 3.03% and 6.47%, respectively.  Earnings of Discover Financial Services DFS, however, beat the mark by 50.31%.

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