NEW YORK (TheStreet) -- Shares of FXCM Inc. (FXCM - Get Report) are lower -4.14% to $13.44 on Thursday after the company reported net income declined for the 2014 first quarter to $2.1 million, or 5 cents per diluted share, compared to $6.9 million, or 23 cents per diluted share from the same period last year.
The online provider of foreign exchange trading said adjusted pro forma EBITDA was $24.6 million for the most recent quarter, a 44% drop from $43.8 million reported for the 2013 first quarter.
FXCM's adjusted pro forma net income of $5.2 million, or 7 cents per diluted share, was down 70% from the 17.5 million, or 23 cents per diluted share for the year ago quarter.
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Revenue for the most recent quarter declined 6% to $115.0 million versus $122.9 million from the 2013 first quarter.
TheStreet Ratings team rates FXCM INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate FXCM INC (FXCM) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its notable return on equity and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- FXCM INC's earnings per share declined by 27.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, FXCM INC increased its bottom line by earning $0.48 versus $0.38 in the prior year. This year, the market expects an improvement in earnings ($0.72 versus $0.48).
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 7.9%. Since the same quarter one year prior, revenues slightly dropped by 0.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Capital Markets industry and the overall market, FXCM INC's return on equity is below that of both the industry average and the S&P 500.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Capital Markets industry. The net income has decreased by 0.9% when compared to the same quarter one year ago, dropping from $3.00 million to $2.97 million.
- You can view the full analysis from the report here: FXCM Ratings Report