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Interactive Brokers Q1 profits down on 2006

30 May 2007  |  1598 views  |  0 Source: Interactive Brokers

Interactive Brokers Group (Nasdaq: IBKR), an automated global electronic market maker and broker, which priced its initial public offering ("IPO") on May 3, 2007, today reported pro forma earnings per share of $0.31 for its quarter ended March 31, 2007, compared to $0.34 for the same period in 2006.

For the quarter ended March 31, 2007, net revenues were $330.8 million and income before income tax was $190.3 million, compared to net revenues of $328.6 million and income before income tax of $215.4 million for the same period in 2006.

These results are the high end of the range of estimated results previously reported on April 13, 2007.

Business Highlights
  • 57.5% pre-tax margin
  • Electronic Brokerage income before income tax increased 59.2%
  • Electronic Brokerage DARTs increased 28% to 245,000
  • Market Making income before income tax decreased 20.9%, in part reflecting lower trading gains driven by options activity prior to corporate announcements
  • Market Making options contract volume increased 11%
  • Interactive Brokers Group accounted for approximately 14.8% of exchange-listed options volume worldwide and approximately 19.9% of exchange-listed options volume in the United States


"During the quarter, the demand for our services continued to expand globally," said Thomas Peterffy, Chief Executive Officer and President. "As the leading automated broker and market maker in exchange traded equities and derivatives, we are continuing to grow by leveraging our proprietary technology and network of connections to market centers around the world to deliver superior value for financial professionals and institutions (including broker-dealers, hedge funds and conventional money managers) that make up our customer base."

Segment Overview

Market Making

Market making options contract volume generated through Timber Hill subsidiaries in the quarter ended March 31, 2007 grew by 11% from the same period in 2006. Market making segment income before income tax decreased 20.9% in the quarter ended March 31, 2007 compared with the same period in 2006, reflecting lower trading gains driven in part by heavy options activity in advance of certain corporate announcements, which had a negative impact on profits.

Electronic Brokerage

Electronic brokerage segment income before income tax increased 59.2% in the quarter ended March 31, 2007 compared with the same period in 2006, reflecting higher revenues from commission and execution fees and growth in net interest income. Total DARTs for cleared and execution-only customers increased 28% to 245,000 during the three months ended March 31, 2007, compared to 192,000 during the three months ended March 31, 2006. The increase in net interest was driven by the growth in customer balances and fully secured margin loans.

Global Volumes

According to data compiled by the Futures Industry Association, global equity-based options exchange volume grew by approximately 23.5% and U.S. exchange volume grew by approximately 25.6%. Interactive Brokers Group accounted for approximately 14.8% of exchange-listed equity options volume traded worldwide and approximately 19.9% of U.S. volume in the first three months of 2007. This compared to approximately 15.6% of exchange-listed equity options volume traded worldwide and approximately 21.7% of U.S. volume in the first three months of 2006.

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