MarketAxess Q4 Earnings in Line, Revs Miss - Analyst Blog
MarketAxess Holdings Inc.
) reported its fourth-quarter 2013 operating net income of 41
cents per share, in line with the Zacks Consensus Estimate.
However, the results increased 7.9% from the year-ago quarter
number of 38 cents that excluded the effect of favorable tax
adjustment of 18 cents.
Bottom-line growth was primarily driven by growing market share of the company as well as record volumes across its core products.
MarketAxess' total revenue grossed $60.4 million in the reported quarter and missed the Zacks Consensus Estimate of $61 million. The figure, however, outpaced the prior-year quarter number by 24.4%. Top-line improvement stemmed from higher commission revenues (up 14.1% year over year) as well as higher information and post-trade service revenues.
The significant surge in revenues from information and post-trade services was due to Xtrakter Limited that generated $5.6 million of revenues during the reported quarter.
Total expense at MarketAxess rose 35.1% to $35.6 million during the reported quarter. The increase was attributable to operating expenses associated with the Xtrakter as well as higher variable incentive compensation, salaries, and depreciation and amortization.
The company reported pretax income of $24.8 million for the third quarter, up 11.8% year over year.
Pre-tax margin contracted 470 basis points year over year to 41%.
Total trading volume of MarketAxess increased 14.9% from the prior-year quarter to $171.3 billion.
Full-Year 2013 Highlights
MarketAxess reported operating net earnings of $1.81 per share for full-year 2013 that increased 24% from the 2012 comparable number.
Total revenue grossed $238.7 million, increasing 25.1% over 2012.
Total expense stood at $131.5 million, escalating 29.5% from the 2012 figure.
MarketAxess exited the fourth quarter of 2013 with total assets of $351.6 million, increasing 25.6% from the 2012 year-end level.
Total cash and cash equivalents was $132.7 million at the end of 2013, up 2.9% from the 2012 year-end level.
At the end of the reported quarter, MarketAxess had total stockholder's equity of $310.4 million, up 27.9% from the end of 2012.
The board of directors of MarketAxess approved a quarterly cash dividend of 16 cents per share which will be paid on Feb 27, 2014 to the stockholders of record as on Feb 13, 2014. This quarterly dividend represents 23.1% increase from the prior one.
Share Repurchase Update
The board of directors at MarketAxess approved $35 million of share repurchase program common stock in early Jan 2014.
MarketAxess expects full-year 2014 total expense to lie in the range of $150-$157 million and the capital spending for the same time period should range within $17 million to $20 million. The full-year effective tax rate guidance range was also updated to 37%-40%.
MarketAxess presently carries a Zacks Rank #3 (Hold). Other better-ranked stocks in the financial sector that are worth considering include CME Group Inc. ( CME ), American Express Company ( AXP ) and Moody's Corporation ( MCO ). All these stocks carry a Zacks Rank #2 (Buy).
AMER EXPRESS CO (AXP): Free Stock Analysis Report
CME GROUP INC (CME): Free Stock Analysis Report
MOODYS CORP (MCO): Free Stock Analysis Report
MARKETAXESS HLD (MKTX): Free Stock Analysis Report
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