Shares of Virtu Financial (NASDAQ: VIRT) fell more than 18% on Thursday following the release of the financial services company's second-quarter results.
Virtu Financial posted a net loss of $55.5 million, which it said was due to costs related to its $1 billion acquisition of Investment Technology Group (ITG). On an adjusted basis, the company's non-GAAP earnings per share came in at $0.16. That was well below Wall Street's expectations for adjusted EPS of $0.28.
Trading revenue declined by 20% year over year to $205.9 million, as lower volatility and trading volumes in many of the markets in which it operates weighed on its results.
"Against a challenging backdrop in the second quarter, our business performed adequately," CEO Douglas Cifu said in a press release. "The market-making segment was impacted to the greatest extent. However, our execution services business, buoyed by the ITG acquisition, performed very well given the market conditions."
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Cifu said that Virtu has benefited from heightened market volatility so far in August, brought about in part by escalating trade tensions between China and the U.S. The company's trading operations tend to be more profitable when market prices fluctuate to a greater degree.
"While July market conditions were similar to the second quarter overall, we have seen a material increase in volatility in August and a commensurate increase in performance in all of our businesses," Cifu said.
This article was originally published on Fool.com