Raymond James reiterated its strong buy rating on brokerage firm BGC Partners, Inc. (NASDAQ:BGCP). The move follows a mostly solid 4Q2015 report in which EPS and revenue surpassed expectations. However, real estate was a little bit of a headwind and the 1Q2016 outlook also appears tepid relative to expectations.

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In its updated note on BGC, Raymond James compares the company’s reported 4Q2015 results with its own estimates as well as the Wall Street consensus.

BGC’s adjusted EPS of $0.20 beat both Raymond James’ and consensus estimate of $0.19. Revenue of $692 million for the quarter also came above Raymond James’ and Street consensus of $690 million.

However, BGC Partners incurred higher operating expenses in the quarter, losing $600 million on that front. Raymond James had expected operating expenses in 4Q to come in at $598 million.

Category Performance

Despite softness in most of its other asset classes, BGC managed to deliver Financial services brokerage revenue of $349 million, comfortably beating Raymond James’ target of $336 million.

BGC Partners’ non-brokerage revenue of $1.5 million also surpassed Raymond James’ estimate by 9%. The gain in non-brokerage revenue helped offset the weakness in software and market data revenues.

BGC Partners’ commercial real estate division lacked the strength expected as brokerage revenue of $236 million in the category missed Raymond James’ target of $249 million.

Operating Margins

Higher non-compensation expenses put a squeeze on operating margins in Q4, but BGC still managed to expand the metric. Operating margin still rose and beat Raymond James estimate by 31bps. The 20bps reduction in compensation ratio supported margin improvement.

1Q2016 guidance

BGC is looking for first quarter revenue to improve in the range of 13% to 21% to come in between $635 and $680 million. Raymond James on its part is modeling 1Q revenue of $699 million.