Cantor Fitzgerald subsidiary reports strong earnings, earmarks $4.9 million for families

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Posted 1:21PM on Wednesday, February 13, 2002

NEW YORK - Just five months after it lost 658 employees in the Sept. 11 attacks, Cantor Fitzgerald posted better than expected earnings for its eSpeed subsidiary and said it will use $4.9 million in profits to fulfill the first installment in a pledge to aid the families of victims. The quick rebound in business at publicly traded eSpeed makes it likely that Cantor will be able to eventually provide more than the $100,000 it has promised each of those families, Cantor's chairman, Howard Lutnick, said Wednesday. "I certainly had not expected the first quarter starting with the weeks after Sept. 11 to be as strong as it was," Lutnick said. "I think that bodes well for our ability (to aid families.) It means we are likely to exceed the $100,000 in cash, on top of healthcare." Cantor pledged last year to set aside 25 percent of its profits over the next five years for the families of those killed, or at least $100,000 per family. The company also promised to pay for 10 years of healthcare insurance for the families of those killed, those they were engaged to marry, and to domestic partners. The profits shared from the company's fourth quarter will be split, with $900,000 used for the health care costs and the remaining $4 million going directly to the families, Lutnick said. That should result in a check of about $6,000 per family, to be sent out later this month. The profits partly reflect a strong performance by eSpeed, which is 51.6 percent owned by Cantor, and reported its first quarterly profit ever. In the quarter that ended Dec. 31, eSpeed posted net income of $7.8 million, or 14 cents a share, figures that include $3.9 million in insurance payments and other gains directly related to the terrorist attacks, and $600,000 in special charges. That compares to a net loss of $5.2 million, or 10 cents a share, in the same period a year ago. Not counting those one-time gains and expenses, the company had net operating income of $4.5 million, or 8 cents a share. That exceeds the expectations of 2 cents per share forecast by analysts surveyed by Thomson Financial/First Call. For the year, eSpeed had a net loss of $18.3 million, or 34 cents a share, compared to a net loss of $59.1 million, or $1.15 a share for 2000. Not including one-time gains and expenses, the company's net loss from operations was $2.6 million for the year, or 5 cents per share, down from $27 million, or 52 cents a share, in 2000. Lutnick said eSpeed now expects 2002 earnings of 40 to 47 cents per share, far more than the 19 cents a share analysts had been projecting. Cantor is a private partnership and is not required to report its earnings, but Lutnick said the profit sharing payment shows that the parent company earned just under $20 million in the three months ending Dec. 31. That is substantially less than in the past, but he would not say precisely how much it earned in the same period a year ago. In addition to the profits Cantor is parcelling out to families, Lutnick and Cantor's other partners have matched $3.5 million contributions to a relief fund that has gathered a total of $14 million for the survivors. Employees in its equity division have also pledged to donate $4 million to the families of 128 co-workers killed in the attacks.