BGC Partners Sees 3Q Upside

Goldman Sachs has published a research report on BGC Partners, Inc. BGCP after the company reported higher revenues and an $0.02 upside to 3Q earnings results. In the report, Goldman Sachs writes "BGCP reported 3Q10 pro forma operating EPS of $0.17, ahead of our $0.15 estimate and consensus of $0.14. Upside relative to our estimate owed to better revenues in brokerage ($0.01 of upside) and other revenue ($0.01 of upside, though non-recurring), while a lower comp rate ($0.04 of upside) was offset by higher non-comp ($0.04 of downside variance). Revenue of $327 mn was ahead of BGCP's prior outlook for $295-315 mn, and included $3 mn from newly acquired Mint brokerage. BGCP also provided a 4Q2010 Outlook that is similar to the 3Q outlook, and would lead to earnings (post tax) at a $35 mn mid-point. The 3Q10 compensation to net revenue rate of 54.2% was the lowest on record, and was significantly lower than the 58% we expected. The tax rate remained at 15% on a non-GAAP basis." Goldman Sachs maintains its Neutral rating on BGC Partners, which closed yesterday at $7.21. A conference call for BGC Partners is scheduled for today at 8:30am at (888) 713-4217, passcode 86088995.