Acquisition-related costs weigh on Virtu Financial’s earnings in Q4 2019

Maria Nikolova

The company reported a net loss of $29.4 million for the final quarter of 2019, blaming the result on costs related to the ITG acquisition.

Virtu Financial Inc (NASDAQ:VIRT) has just published its financial report for the fourth quarter and full year ended December 31, 2019.

In the final quarter of 2019, the company registered total revenues of $403.3 million, down 8.8% from a year earlier, impacted by muted volatility and volumes across global markets compared to $442.2 million for the same period in 2018 which was driven by high volatility in the markets. Trading income, net, decreased 37.6% to $228.7 million for the fourth quarter of 2019, compared to $366.2 million for the same period in 2018.

There was a net loss of $29.4 million for the final quarter of 2019, driven by costs related to the ITG acquisition, compared to net income of $147.9 million for the equivalent period in 2018.

Basic and diluted loss per share for the final quarter of 2019 was $0.16, compared to earnings per share of $0.75 and $0.74, respectively, for the same period in 2018.

Adjusted Net Trading Income decreased 14% to $257.2 million for the fourth quarter, compared to $299.2 million for the same period in 2018. Adjusted EBITDA decreased 41.3% to $114.6 million for the final quarter of 2019, compared to $195.1 million for the same period in 2018.

During full year 2019, total revenues decreased 18.6% to $1,530.1 million, also impacted by lower volatility and volumes across global markets, compared to $1,878.7 million for 2018, which had high volatility in the first and fourth quarters. Trading income, net, decreased 28% to $912.3 million for this year, compared to $1,266.7 million for 2018.

For the full year, there was a net loss of $103.7 million, due to costs related to the ITG acquisition, compared to net income of $620.2 million for 2018.

Basic and diluted loss per share was $0.53 for 2019, compared to earnings per share of $2.82 and $2.78, respectively, for the same period in 2018.

Adjusted Net Trading Income decreased 4.5% to $974.7 million for this year, compared to $1,020.3 million for 2018. Adjusted EBITDA decreased 30.3% to $431.9 million for this year, compared to $620.0 million for 2018. Normalized Adjusted Net Income decreased 50.5% to $185.7 million for this year, compared to $375.0 million for 2018.

The Virtu Financial, Inc. Board of Directors declared a quarterly cash dividend of $0.24 per share. This dividend is payable on March 16, 2020 to shareholders of record as of March 2, 2020.

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