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Interactive Brokers Group Announces 2Q2012 Results

Stocks in this article: IBKR

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 $0.09 for the quarter ended June 30, 2012, compared to diluted earnings per share on a comprehensive basis of $0.31 for the same period in 2011.

Reported results on a comprehensive basis reflect the GAAP convention adopted in 2011 that requires the reporting of currency translation results contained in Other Comprehensive Income as part of reportable earnings. Previously, currency translation results were reported as a component of changes in Total Equity in the Statement of Financial Condition.

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 $0.17 for the quarter ended June 30, 2012, compared to diluted earnings per share of $0.22 for the same period in 2011.

Net revenues were $261 million and income before income taxes was $109 million for this quarter, compared to net revenues of $297 million and income before income taxes of $149 million for the same period in 2011.

The Interactive Brokers Group, Inc. Board of Directors declared a quarterly cash dividend of $0.10 per share. This dividend is payable on September 14, 2012 to shareholders of record as of August 31, 2012.

Business Highlights

  • 42% pretax profit margin for this quarter.
  • $5.0 billion in equity.
  • 53% Electronic Brokerage pretax profit margin for this quarter.
  • 26% Market Making pretax profit margin for this quarter, compared to 47% in the year-ago quarter, primarily as a result of our currency hedging strategy.
  • Customer equity grew 11% from the year-ago quarter to $28.6 billion and customer accounts increased 14% to 200 thousand.
  • Cleared DARTs increased 6% from the year-ago quarter to 399,000.

Segment Overview

Electronic Brokerage

Electronic Brokerage segment income before income taxes increased 1%, to $90 million, in the quarter ended June 30, 2012 compared to the same period last year. Commissions and execution fees increased 2% from the year-ago quarter, reflecting more customer accounts but lighter customer trading activity per account. Annualized DARTS per cleared customer account were 507 in this quarter, compared to 554 for the same period in 2011. These declines were consistent with lower industry volumes.

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