Interactive Brokers Group, Inc.
) second-quarter 2014 adjusted earnings per share of 26 cents
missed the Zacks Consensus Estimate of 29 cents. However, the
reported figure was up from 21 cents earned in the year-ago
Results benefited mainly from growth in revenues as well as
substantial control in non-interest expenses. Sustainable
performances of both the Electronic Brokerage and Market Making
segments also aided the overall results.
Net income available to common shareholders in the reported quarter
was $15.1 million, up 46.6% from $10.3 million in the prior-year
Interactive Brokers Group, Inc - Quarterly EPS
(BNRI) | FindTheBest
Performance in Detail
Interactive Brokers' net revenue came in at $309.3 million, up 8.9%
year over year. The increase was mainly driven by substantial
trading gains and higher interest income as well as lower interest
expenses, partly offset by fall in other income and commission and
Total non-interest expenses were $135.1 million, down 9.9% from the
prior-year quarter. The decline was largely due to reduction in
employee compensation and benefits as well as execution and
clearing expenses. However, these positives were somewhat offset by
a rise in occupancy costs, communications expenses as well as
general and administrative expenses
Income before income taxes rose to $174.2 million, up 30.1% from
the year-ago quarter. Similarly, pre-tax profit margin mounted to
56% from 47% in the prior-year quarter.
As of Jun 30, 2014, cash and cash equivalents (including cash and
securities set aside for regulatory purposes) were $16.5 billion
compared to $15.2 billion as of Dec 31, 2013. Total assets were
$40.2 billion as of Jun 30, 2014 compared to $37.9 billion as of
Dec 31, 2013.
Total equity came in at $5.3 billion as of Jun 30, 2014 versus $5.1
billion as of Dec 31, 2013.
Market Making: Net revenue was $91.9 million, up 36% from the
prior-year quarter. Similarly, pre-tax income was $46.5 million
compared with $7.6 million in the year-ago quarter. Further,
pre-tax profit margin was 51% compared with 11% in the year-ago
quarter. The rise in pretax income was mainly attributable to
currency translation effects.
Electronic Brokerage: Net revenue improved 3.8% year over year to
$220.6 million. Pre-tax income increased 6.6% to $131.4 million.
Further, pre-tax profit margin rose to 60% from 58% in the
prior-year quarter. Additionally, total daily average revenue
trades (DARTs) for cleared-only customers increased 5% year over
year to 484,000.
Interactive Brokers' healthy balance sheet with low leverage and
strong financials are expected to enhance investors' confidence in
the stock. Moreover, the company's focus on diversification and
technological excellence will likely aid growth going forward.
However, Interactive Brokers' DARTs which have been under pressure
since the beginning of the year as well as its exposure to certain
risks associated with international operations make us wary of its
long-term growth sustainability. Also, the Market Making segment's
high sensitivity to the fluctuating volatility is keeping us
Interactive Brokers' currently carries a Zacks Rank #4 (Sell).
Among other major investment brokers,
) is scheduled to report third-quarter fiscal 2014 results on Jul
GFI Group Inc.
) are slated to announce their second-quarter results on Jul 23 and
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