Chicago Board of Trade's
profit rosedramatically in the fourth quarter, meeting WallStreet's high growth expectations, after refining itselectronic platform and raising contract prices.
The CBOT's fourth-quarter earnings increased to $17.7million, or 34 cents a share, compared with a loss of $2.7million loss in the fourth quarter of 2004. Fourth-quarter total revenue was $117.4 million, up from$83.6 million in the fourth quarter of 2004.
The company matched the Thomson First Call consensusestimate of 34 cents a share.
"In 2005, the CBOT achieved substantial success -- bothoperationally and financially. During the 2005 fourthquarter, we successfully implemented a major upgradeto our electronic trading platform, we completed ourinitial public offering and posted 33% exchangeand clearing fee revenue growth," the company said in a release.
The exchange, which went public last October, earnsover 80% of its revenue from trades of the long-terminterest-rate contract, to which CBOT owns exclusive rights. While revenue increased substantially in this group, it came from an increase in the price ofcontracts, not in the volume traded.
CBOT average revenue per contract increased by more than 14%from the third quarter, from 46.9 cents to 53.7 cents. The latest quarter is up almost 40% from the same quarter in 2004.
But the CBOT's overall volume fell in the quartercompared to the same quarter last year, with the totalnumber of contracts traded falling from 153.4 millionto 151.4 million. The drop in total volume traded camedespite CBOT's commitment to its electronic tradingplatform. Contracts traded electronically made up 68%of all the contracts traded on the exchange in thefourth quarter, up from 64% from the same quarterin the previous year.
The average daily volume of the long-term interestrate contract also fell slightly in the fourthquarter, compared to last year. Daily volume decreasedfrom 2.0 million contracts per day to 1.9 million.
For the year, revenue was at all-time high of $466.6million, a 23% gain from $380.2 million in 2004. Netincome for the year was a record $76.5 million, rising82% from $42 million in the prior year.