Interactive Brokers Group Announces 1Q2013 Results
Reports Comprehensive Earnings per Share of $0.06, Income Before Taxes of $82 Million On $216 Million
in Net Revenues And Earnings per Share on Net Income of $0.14;
Declares Quarterly Dividend of $0.10 Per Share.
GREENWICH, CONN, April 16, 2013 - Interactive Brokers Group, Inc. (NASDAQ GS: IBKR) an automated global electronic broker and market maker, today reported diluted earnings per share on a comprehensive basis of $0.06 for the quarter ended March 31, 2013, compared to diluted earnings per share on a comprehensive basis of $0.33 for the same period in 2012.
On a non-comprehensive basis, which excludes the effect of changes in the U.S. dollar value of the Company's non-U.S. subsidiaries, the Company reported diluted earnings per share on net income of $0.14 for the quarter ended March 31, 2013, compared to diluted earnings per share of $0.27 for the same period in 2012.
Net revenues were $216 million and income before income taxes was $82 million for this quarter, compared to net revenues of $304 million and income before income taxes of $150 million for the same period in 2012.
The Interactive Brokers Group, Inc. Board of Directors declared a quarterly cash dividend of $0.10 per share. This dividend is payable on June 14, 2013 to shareholders of record as of May 31, 2013.
Business Highlights
- 38% pretax profit margin for this quarter.
- 57% Electronic Brokerage pretax profit margin for this quarter.
- Customer equity grew 23% from the year-ago quarter to $35.6 billion and customer debits increased by 32%, to $11.1 billion.
- Customer accounts grew 11% from the year-ago quarter to 217 thousand.
- Cleared DARTs increased 8% from the year-ago quarter to 422 thousand.
- Brokerage segment equity surpassed $2 billion. Total equity was $4.83 billion.
Segment Overview
Electronic Brokerage
Electronic Brokerage segment income before income taxes increased 33%, to $111 million, in the quarter ended March 31, 2013 compared to the same period last year. Commissions and execution fees increased 19% from the year-ago quarter, reflecting growth in customer accounts and larger average trade sizes. Net interest income grew 26% from the year-ago quarter, to $54 million in this quarter. Pretax profit margin was 57% for this quarter, up from 52% in the same period last year.
Total DARTs for cleared and execution-only customers increased 9% to 465,000 from the year-ago quarter. Cleared DARTs were 422,000 in this quarter, 8% higher than the same period last year. Customer accounts grew 11% to 217,000 from the year-ago quarter. Customer equity increased 23%, to $35.6 billion, from the year-ago quarter. Customer margin borrowings were $2.7 billion higher than at the same time last year, ending the quarter at $11.1 billion.
Market Making
Market Making segment income before income taxes decreased to a $29 million loss, for the quarter ended March 31, 2013 from a $66 million gain for the same period in 2012. Removing the effects of currency translation, the Market Making segment produced a $32 million gain in this quarter, compared to a $67 million gain for the same period last year. Decrease in profit was driven by an unfavorable market making environment with low volatility, one-directional market movement, and tight bid/offer spreads. The CBOE Volatility Index, or VIX, was at the lowest level in recent history this quarter.
Currency translation loss was $61 million in this quarter, compared to a $1 million loss in the year-ago quarter.
Effects of Foreign Currency Diversification
In connection with our currency strategy, we have determined to base our net worth in GLOBALs, a basket of 16 major currencies in which we hold our equity. In this quarter, our currency hedging program decreased our comprehensive earnings by $92 million, as the U.S. dollar value of the GLOBAL decreased by approximately 1.9%. The effects of currency hedging are reported as components of (1) Market Making Trading Gains and (2) Other Comprehensive Income ("OCI"). In this quarter two-thirds of the GLOBAL effect was captured in Market Making Trading Gains in the Net Income section of the Statement of Comprehensive Income, with the remainder reported as OCI in the separate Comprehensive Income section of the Statement of Comprehensive Income.
(1)Daily average revenue trades (DARTs) are based on customer orders.
Conference Call Information:
Interactive Brokers Group will hold a conference call with investors today, April 16, 2013, at 4:30 p.m. ET to discuss its quarterly results. Investors who would like to listen to the conference call live should dial 877-324-1965 (U.S. domestic) and 631-291-4512 (international). The number should be dialed approximately ten minutes prior to the start of the conference call. Ask for the "Interactive Brokers Conference Call."
The conference call will also be accessible simultaneously, and through replays, as an audio webcast through the Investor Relations section of the Interactive Brokers web site, www.interactivebrokers.com/ir.
About Interactive Brokers Group, Inc.:
Interactive Brokers Group, Inc., together with its subsidiaries, is an automated global electronic broker that specializes in catering to financial professionals by offering state-of-the-art trading technology, superior execution capabilities, worldwide electronic access, and sophisticated risk management tools at exceptionally low costs. The brokerage trading platform utilizes the same innovative technology as the Company's market making business, which specializes in routing orders and executing and processing trades in securities, futures, foreign exchange instruments, bonds and funds on more than 100 electronic exchanges and trading venues around the world. As a market maker, we provide liquidity at these marketplaces and, as a broker, we provide professional traders and investors with electronic access to stocks, options, futures, forex, bonds and mutual funds from a single IB Universal AccountSM. Employing proprietary software on a global communications network, Interactive Brokers is continuously integrating its software with a growing number of exchanges and trading venues into one automatically functioning, computerized platform that requires minimal human intervention.
Cautionary Note Regarding Forward-Looking Statements:
The foregoing information contains certain forward-looking statements that reflect the company's current views with respect to certain current and future events and financial performance. These forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the company's operations and business environment which may cause the company's actual results to be materially different from any future results, expressed or implied, in these forward-looking statements. Any forward-looking statements in this release are based upon information available to the company on the date of this release. The company does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any statements expressed or implied therein will not be realized. Additional information on risk factors that could potentially affect the company's financial results may be found in the company's filings with the Securities and Exchange Commission.
For Interactive Brokers Group, Inc. Media: Caitlin Duffy, 203-913-1369 or Investors: Deborah Liston, 203-618-4070.
Interactive Brokers Group, Inc. and Subsidiaries Operating Data
Interactive Brokers Group, Inc. and Subsidiaries Segment Financial Information (Unaudited)
Interactive Brokers Group, Inc. And Subsidiaries Consolidated Statements Of Comprehensive Income (Unaudited)
Interactive Brokers Group, Inc. and Subsidiaries Earnings per Share on Comprehensive Income (Unaudited)
Interactive Brokers Group, Inc. and Subsidiaries Condensed Consolidated Balance Sheet (Unaudited)
