OptionsXpress Holdings (NasdaqGS: OXPS) today reported results for the three months and full year ended December 31, 2008.
Highlights from the fourth quarter 2008 included:
- Revenues of $57.3 million, a 17% decrease year-over-year
- Net income of $19.2 million, or $0.32 per diluted share
- Record daily average revenue trades (DARTs) of 51,400, a 24% increase year-over-year
- Net new account growth of 13,400
Highlights from the full year 2008 included:
- Revenues of $246.6 million, flat year-over-year
- Net income of $90.3 million, or $1.49 per diluted share
- Ending accounts of 318,600, a 21% increase year-over-year
- $4.9 billion in customer assets on December 31, 2008, a 15% decrease year-over-year
"While 2008 was one of the most challenging years the financial markets have seen, our resilient business model performed well," commented David Fisher, Chief Executive Officer of optionsXpress. "The fourth quarter in particular saw sharp spikes in volatility and dramatic government actions. Facing these conditions, our customers were comforted by our high-quality investor education, the stability of our platform and the powerful tools we put at their disposal and continued to use options and futures as part of their long term investing strategies. Our customer assets held up well throughout the turmoil, declining only 8% during the quarter and 15% during the year, compared to S&P 500 declines of 22% during the quarter and 38% for the year. This strength in customer assets positions us well for the future."
For the fourth quarter, retail DARTs of 35,000 declined by 16% from the fourth quarter of 2007, and were down 3% from the third quarter. Institutional DARTs were 16,400 in the fourth quarter, up 39% from the third quarter. Trades per account on an annualized basis were 42, up from 41 in the fourth quarter of 2007, and 41 in the third quarter of 2008. Net revenues decreased 17% versus the fourth quarter of 2007 and 14% versus the third quarter of 2008. Resulting net income was $19.2 million, or $0.32 per share on a diluted basis, a 31% decrease from $28.0 million in the fourth quarter of 2007.
At the end of 2008, total customer accounts were 318,600, up 21% from 2007. Total customer assets at year-end 2008 were $4.9 billion, down 15% from year-end 2007 customer assets of $5.8 billion. Commission revenues for 2008 were $167.6 million, up 9% from 2007. 2008 full year total net revenues were $246.6 million, which was slightly lower than net revenues of $247.0 million in 2007, and 2008 full year earnings per share were $1.49, a 4% decrease versus earnings per share of $1.55 in 2007.
"We maintained industry leading pre-tax margins of 57% in 2008 despite significant interest rate headwinds, which drove net interest revenues down 19% compared to 2007," said Adam DeWitt, Chief Financial Officer of optionsXpress. "Additionally, our strong balance sheet, excellent cash flow and lack of debt provide us significant capital flexibility to pursue ways to create value for our shareholders, including strategic acquisitions."
During the quarter, optionsXpress announced a dividend of $0.08 per share. The total amount of the dividend was approximately $4.7 million and was paid to shareholders on December 30, 2008.
Outlook
"While we acknowledge that market challenges are likely to persist into 2009, we remain confident in our prospects for long-term growth. Our platform helped our customers navigate the market turbulence in 2008 and we believe it will help our customers remain resilient in 2009," continued Mr. Fisher. "We also believe that self-directed retail investors will increasingly turn to options and futures in their personal investing strategies. To support this trend at optionsXpress, we will continue to develop education, tools and products that appeal to a wide range of investors from beginners to experts."
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