CBOE Holdings Inc. ( CBOE ) reported first
quarter 2013 operating earnings of 50 cents per share, surpassing
the Zacks Consensus Estimate of 47 cents per share. Results were
also ahead of the year-ago earnings of 37 cents by 35%.
The improvement came on the back of strong growth in the
proprietary products of CBOE. Trading volume in the VIX Index
options and futures reached new records, while trading in the
S&P 500 options complex also increased considerably, driven by
increase in SPX Weeklys.
During the quarter, CBOE reported net income of 48 cents per
share, up 29.7% year over year. The diffrerence of 2 cents was due
to non-recurring one-time charges.
Quarterly Operational Update
Total operating revenues for the quarter increased 18% year over
year to $142.7 million. Higher revenue was due to increase in
transaction fees (up 16.9% year over year), regulatory fees (up
106.6% year over year), exchange services and other fees (up 22%
year over year), and other revenue (up 73.9% year over year),
partially offset by a decline in market data fees (down 13.1% year
over year). Results also surpassed the Zacks Consensus Estimate of
Total operating expenses of CBOE increased 14.5% year over year to
$73.3 million in the quarter. Increase in expenses came from higher
employee costs (up 21.9%), outside services (up 53.9%), royalty
fees (up 17.7%) and other expenses (up 11.9%).
The extent of increase in operating revenues offset the increase
in expenses, thereby pushing up operating income by 20.9% year over
year to $69.4 million in the reported quarter.
Average revenue per contract increased 35.7% year over year to 38
cents. Results were driven by a shift in the mix of trading volume,
with contracts carrying the highest rate per contract, index
options and futures contracts representing 37.9% of trading volume
during the quarter, up 1250 basis points year over year.
Effective tax rate for the quarter was 38.3%, down 300 basis
points year over year.
On May 1, 2013, the Board of Directors declared a first-quarter
dividend of 15 cents per share representing a year-over-year hike
of 25%. The quarterly dividend will be paid on Jun 21, 2013 to
shareholders of record as on May 31, 2013.
CBOE is currently left with shares worth $103.3 million remaining
under its current share repurchase authorization.
As of Mar 31, 2013, CBOE had cash and cash equivalents of $210.5
million, up 55.2% from 2012 end level.
Total assets of CBOE were $409.6 million at the end of the first
quarter, up 20.9% from $338.9 million at Dec 31, 2012.
Cash flow from operating activities increased 50.4% year over year
to $$95.3 million.
Management expects core operating expenses between $189-$194
million and continuing stock-based compensation expense included in
core expenses to be approximately $18 million for full year
Depreciation and amortization expense for 2013 is expected to be
in the range of $37-$39 million.
CBOE expects capital expenditures to be between $35 million and
$40 million for 2013.
The board anticipated adjusted effective tax rate for 2013 to be
in the range of 39.5%-40%.
Performance of Other Stocks
MoneyGram International Inc. ( MGI ) reported
first-quarter 2013 earnings per share of 27 cents, modestly higher
than the Zacks Consensus Estimate of 24 cents and the year-ago
quarter earnings of 23 cents.
Nasdaq OMX Group Inc. 's ( NDAQ ) first-quarter
2013 operating earnings per share of 64 cents modestly surpassed
the Zacks Consensus Estimate as well as the prior-year quarter
earnings of 61 cents.
CME Group Inc. ( CME ) reported
first-quarter 2013 operating earnings per share of 73 cents. The
result was in line with the Zacks Consensus Estimate of 73 cents
but lagged the year-ago quarter's earnings of 80 cents.
CBOE currently carries a Zacks Rank #2 (Buy).CBOE HOLDINGS (CBOE): Free Stock Analysis
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