BGC Partners updates its outlook for Q3 2022
BGC Partners, Inc. (NASDAQ:BGCP), a leading global brokerage and financial technology company, today announced that it has updated its outlook for the quarter ending September 30, 2022.
BGC’s revenue for the third quarter of 2022 is now expected to be below the midpoint of the range of its previously stated outlook. BGC’s revenue would have been approximately $20 million higher, if not for the strengthening of the U.S. dollar during the period, and above last year’s third quarter revenue, excluding Insurance. BGC’s pre-tax Adjusted Earnings is expected to be around the midpoint of its previously stated outlook.
This guidance reflects continuing FX headwinds for the euro and pound sterling, which are both tracking over 14% lower versus the U.S. dollar, on average, compared to the year ago period. This decline has accelerated toward the end of the third quarter, with the euro and pound sterling down over 16% and 19%, respectively, versus the U.S. dollar compared to a year ago.
BGC generated total revenue of $435.8 million during the second quarter of 2022, which declined 4.9 percent versus last year (0.5 percent on a Constant Currency basis), excluding Insurance. During the quarter, the U.S. dollar appreciated against most major currencies, and particularly against the euro and pound sterling, which were approximately 12 percent and 10 percent lower, respectively.
BGC expects the current rising interest rate environment to create, over the next two or three quarters, an uneven market for the industry with some product categories increasing dramatically, while others face short-term challenges as their key market participants deal with the difficulty of trading through rising interest rates.