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Virtu Financial (VIRT) to Report Q1 Results: What to Expect

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Virtu Financial, Inc. (VIRT - Free Report) will release first-quarter 2021 results on May 4, before the market opens.

The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is pegged at $1.30 per share, suggesting a 36.6% decline from the year-ago period’s reported figure.

Virtu Financial’s fourth-quarter 2020 earnings per share of $1.18 beat the Zacks Consensus Estimate of 81 cents by 45.7%. Moreover, the bottom line skyrocketed 337% year over year on the back of reduced costs and higher revenues.

Key Factors to Impact Q1 Results

The company’s first-quarter results are likely to reflect lower revenues. Virtu Financial gains from a volatile market. Compared to the prior-year quarter, the first-quarter market was stable. Thus, the downtrend is expected to have occured in the to-be-reported quarter. Lower trading volumes are also likely to dampen results.

Despite the fact that market volatility remains above the 2019 levels, it stabilized from the first half of 2020. Virtu Financial’s performance is likely to be unimpressive in the days ahead as the markets started recovering to a certain extent. Also, decline in market volatility leads to an uninterrupted financial market wherein demand for liquidity shrinks and trading and profit opportunities dwindle for Virtu Financial.

The consensus mark for first-quarter revenues stands at $551 million, indicating a decrease of 29.7% from the year-ago period’s reported figure.

Adjusted net trading income-global equities are likely to have been affected by a stable market condition. The consensus estimate from the same stands at $348 million, suggesting a downfall of 39.2% from the prior-year quarter’s reported number.

Nevertheless, its Execution Services segment is expected to have performed well on the back of better commissions, workflow technology and analytics. The consensus mark for net trading income -Execution Services suggests an increase of 3.8% from the year-earlier period’s reported figure.

Given the current rebounding economic situation, the company’s Market Making segment might have been hit to some extent. The consensus mark for its adjusted net trading income suggests a decline of 41% from the year-ago quarter’s reported figure.

However, owing to its financial strength, the company is likely to have continued with its share buyback policies.

Meanwhile, the company is likely to have endured escalating expenses due to higher brokerage, exchange, clearance fees and payments for order flow, employee compensation and payroll taxes, prepayment and commitment fees among others.

What the Quantitative Model Predicts

Our proven model predicts an earnings beat for Virtu Financial this reporting cycle. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive surprise. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP:  Virtu Financial has an Earnings ESP of +3.26%. This is because the Most Accurate Estimate is pegged at $1.35, higher than the Zacks Consensus Estimate of $1.30. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Virtu Financial, Inc. Price and EPS Surprise

Virtu Financial, Inc. Price and EPS Surprise

Virtu Financial, Inc. price-eps-surprise | Virtu Financial, Inc. Quote

Zacks Rank:  Virtu Financial currently carries a Zacks Rank #2 (Buy).

Other Finance Sector Releases

Of the finance sector players that reported first-quarter results so far, the bottom-line results of  American Express Company  (AXP - Free Report) , Synchrony Financial  (SYF - Free Report) and  Discover Financial Services  (DFS - Free Report) beat the Zacks Consensus Estimate by give % of each.

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