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Trading firm Virtu expects to see Q4'18 net income jump at least 199% YOY

Virtu Financial Inc. provided preliminary earnings results for the fourth quarter of 2018, saying it expects to see a sharp rise in its results from the prior-year period.

The trading giant expects to report net income between $100 million and $129 million for the three-month period, which would be 199% to 286% higher than the $33.4 million posted in the prior-year period.

Net trading income is expected to rise year over year from $286.4 million to between $350 million and $364 million for the period ending Dec. 31, 2018. Virtu projected that adjusted net trading income will be between $285 million and $298 million, versus the $237.3 million reported a year earlier.

The jump in trading income was tied to the spiking market volatility seen late in 2018, which prompted investors to begin shuffling their holdings. Market makers and trading companies such as Virtu tend to prosper during market volatility as they collect small price differences when handling investors' orders, which adds up over the millions of trades executed daily in U.S. markets.

Total revenues for the fourth quarter are expected to come in between $424 million and $447 million, marking a decrease of 3.8% to 8.7% from the fourth quarter of 2017. The company attributed the decline to the reversal of a tax liability in the fourth quarter of 2017 that stemmed from the late 2017 U.S. tax reforms. Excluding the impact of the reversal, Virtu said its revenues would increase 12.2% to 18.3% year over year.

The company is expected to report its actual fourth-quarter 2018 results in early February.