CBOE Holdings Inc.
) reported third-quarter 2013 adjusted net earnings of 47 cents
per share beating the Zacks Consensus Estimate of 45 cents per
share. Results were also above of the year-ago earnings of 43
The improvement came on the back of strong trading volumes in the
SPX options complex and VIX Index options, and futures.
CBOE Holdings reported net income of $41 million or 47 cents per
share in the third quarter, compared to $45.2 million or 52 cents
per share in the third quarter of 2012.
Quarterly Operational Update
Total operating revenues for the quarter increased 7% year over
year to $136.7 million. Higher revenue was due to increase in
transaction fees (up 7% year over year), regulatory fees (up
56.5% year over year), and exchange services and other fees (up
18.6% year over year), partially offset by a decline in other
revenues. However, results missed the Zacks Consensus Estimate of
Adjusting for volume-based expenses, depreciation and
amortization, accelerated stock-based compensation expense and
unusual or one-time expenses, core operating expenses of CBOE
Holdings decreased 3% year over year to $44.8 million in the
quarter. The decline was attributable to decreasing expenses in
legal expenses that resulted in lower expenses for outside
services. As a result operating margin increased 260 basis points
year over year 50% in the reported quarter.
Average revenue per contract (total transaction fee revenue/
total reported trading volume) decreased 1% year over year to 32
cents. The downside came from an increase in volume-based
incentives for some of the multiply-listed options under the VIP
program of the company.
Effective tax rate for the quarter was 39.1%, up 1470 basis
points year over year due to the recognition of some discrete
items relating to 2012 and the years before.
On Jul 30, 2013, the board of directors of CBOE Holdings
increased its dividend by 20% to 18 cents from 15 cents paid on
Jun 21, 2013.
On Oct 24, 2013, the Board of Directors declared the
third-quarter dividend of 18 cents per share that will be paid on
Dec 20, 2013 to shareholders of record as on Nov 29, 2013.
CBOE Holdings repurchased 0.3 million shares for $14 million in
the third quarter of 2013. The company is currently left with
shares worth $89.3 million remaining under its current share
As of Sep 30, 2013, CBOE Holdings had cash and cash equivalents
of $226.4 million, up 66.9% from 2012 end level.
Total assets of CBOE Holdings were $441.2 million at the end of
the first nine months of 2013, up 30.2% from $338.9 million at
Dec 31, 2012.
Cash flow from operating activities in the first nine months
stood at $172.4 million, up 22.4% year over year.
Management reaffirmed its core operating expenses guidance at
$189-$194 million. Further, continuing stock-based compensation
expense included in core expenses was reaffirmed at approximately
$18 million for full year 2013.
Lower than expended capital segment caused CBOE Holdings to
lower its depreciation and amortization expense for 2013 to $34
million to $36 million, from the previous guidance of $37-$39
CBOE Holdings expects capital expenditures for 2013 to be
between $33 million and $36 million, lower than the previous
guidance of $35 million and $40 million.
The board anticipated adjusted effective tax rate for 2013 to
be in the range of 39% to 39.5%, lower than the previous guidance
Performance of Other Stocks
MarketAxess Holdings Inc.
) reported its third-quarter 2013 operating net income of 44
cents per share, surpassing the Zacks Consensus Estimate by
Nasdaq OMX Group Inc.
) reported third-quarter 2013 operating earnings per share of 66
cents. The result beat the Zacks Consensus Estimate by 4
MoneyGram International Inc.
) reported third-quarter 2013 earnings per share of 31 cents,
missing the Zacks Consensus Estimate by a penny.
CBOE Holdings currently carries a Zacks Rank #3 (Hold).
CBOE HOLDINGS (CBOE): Free Stock Analysis
MONEYGRAM INTL (MGI): Free Stock Analysis
MARKETAXESS HLD (MKTX): Free Stock Analysis
NASDAQ OMX GRP (NDAQ): Free Stock Analysis
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