eSpeed reports Q4 profit, forecasts Q1 profit
biz.yahoo.com
NEW YORK, Feb 12 (Reuters) - ESpeed (NasdaqNM:ESPD), the electronic trading arm of bond broker Cantor Fitzgerald, reported on Tuesday its first-ever profit in the quarter following the Sept. 11 attacks that destroyed its headquarters and killed 180 of its employees.
ESpeed, whose core business is acting as the middleman in U.S. Treasury bond trades between large securities firms and investment banks, also said its operating profits for 2002 would exceed current Wall Street estimates as the firm reintroduces products it had halted trading.
For the fourth quarter, it reported a net profit of $7.8 million, or 14 cents a share, including one-time gains in part for insurance claims related to the attacks on the World Trade Center, compared with a loss of $5.2 million, or 10 cents a share, a year earlier. Excluding those gains, the company reported a profit of $4.5 million, or 8 cents a share.
The results exceeded the average forecast among Wall Street analysts of 2 cents a share before one-time items, according to research firm Thomson Financial/First Call. Earlier this month, eSpeed said it would meet or beat its earlier estimates of 1 cent to 5 cents a share.
``ESpeed delivered an impressive quarter, coming through the most difficult of events,'' said Howard Lutnick, chief executive of eSpeed and Cantor, in a statement. ``We recorded $28.1 million in revenues, leading to profitability far beyond our expectations.''
Revenues rose 4.7 percent from $26.9 million reported during the same quarter one year ago as some of its expenses declined. Total compensation and employee benefits fell by half to $7.3 million compared to $14.7 million one year ago.
Since Sept. 11, eSpeed has handled the vast majority of Cantor's U.S.-based brokerage business. But the firm said total transaction volume -- which included voice-assisted trades -- slipped 27 percent to $7.2 trillion in the fourth quarter of 2001 versus the same period last year as most of its New York voice-based brokers died in the attacks.
Todd Halky, an analyst who covers eSpeed for Putnam Lovell Securities in New York, said higher electronic trading volumes in U.S. Treasuries -- eSpeed's core product -- was ``definitely a driver'' in eSpeed's rise in revenues.
``The growth in our core business, indicated by fully electronic volume increases, illustrates that we have maintained our market share and continue to dominate the electronic trading of fixed income, despite the events and aftermath of September 11th,'' Lutnick said.
Looking ahead, the company said it expected revenues to rise in excess of $124 million in 2002, and operating earnings of 40 cents to 47 cents a share, exceeding current Wall Street estimates of 19 cents.
``That is an optimistic statement and higher than what the Street had anticipated,'' said Halky, who had previously forecast $117 million in revenues for 2002.
ESpeed also forecast a first-quarter profit of between 9 cents and 10 cents a share, compared with current consensus forecasts for 2 cents according to Thomson/First Call.
Lutnick added the firm would reintroduce products it dropped after the attacks and strike deals to license its software. Lutnick has said previously he intends to keep eSpeed's payrolls flat near a current level of about 325.
Earlier Tuesday, TradeSpark, an online energy exchange part owned by eSpeed and Cantor, said it posted record trading volumes in the fourth quarter, in part from the collapse of energy trader Enron Corp. and a halt in its EnronOnline trading system. ESpeed receives commissions for each transaction that TradeSpark, built with eSpeed software, executes.
ESpeed company said it had $159.9 million in cash and cash equivalents as of Dec. 31, 2001, up from $149.1 million at the end of the third quarter and $122.2 million one year earlier.
For the entire year 2001, the company reported a net loss of $2.6 million, or 5 cents a share, compared with a $27 million loss, or 52 cents a share in the prior year. |
