MF Global Ltd., a futures and options broker, said Wednesday it expects to swing to a profit during its fiscal second quarter compared with the year-ago period that included a settlement tied to Philadelphia Alternative Asset Fund Ltd.
MF Global expects to earn between $8 million and $10 million, or 2 cents per share to 4 cents per share, for the quarter ended Sept. 30. The company lost $90.6 million, or 78 cents per share, during the same quarter last year.
Last year's results included expenses paid in a settlement agreement reached during the period. MF Global said it will recover $75 million from the settlement through its insurance carries. The brokerage firm expects to record a $62 million boost in revenue during fiscal third-quarter results tied to the insurance payment.
Adjusted earnings are expected to range between $18 million and $20 million, or 13 cents per share to 15 cents per share, during the quarter. Adjusted net income excludes integration costs, exchange membership gains and losses, initial public offering costs and stock compensation tied to the company's IPO.
Analysts polled by Thomson Reuters, on average, forecast earnings of 21 cents per share for the quarter. Analysts do not always include special charges in their estimates.
Profit was hurt during the quarter by severance costs, which reduced earnings per share by 5 cents and losses tied to the bankruptcy of Lehman Brothers Holdings Inc., which reduced earnings by 2 cents per share, the company said in a statement.
MF Global said trading volume slipped during the fiscal second quarter. MF Global expects volume to total between 495 million and 505 million contracts during the quarter, compared with 541.5 million contracts traded during the same period last year.
MF Global said an industrywide decline in trading volume in August hurt quarterly results, but an increase in volatility and trading in September is a better indication of current trends in the market.
In premarket trading, MF Global shares rose 74 cents, or 33 percent, to $2.99.
