OptionsXpress Q2 net income down

Source: optionsXpress

OptionsXpress Holdings (Nasdaq:OXPS) today reported results for the three months ended June 30, 2010.

Highlights from the second quarter 2010 included:

* Revenues of $65.5 million, a 6% increase year-over-year
* Net income of $15.6 million, $0.27 per diluted share
* Daily average revenue trades (DARTs) of 49,800, a 10% increase year-over-year
* Net new account growth of 7,800 during the quarter, resulting in 365,500 customer accounts, an 8% increase year-over-year
* Ending customer assets of $7.0 billion, a 22% increase year-over-year

"Improved customer engagement in April and volatility-driven trading in May drove our second quarter earnings 20% higher than the first quarter, excluding a gain resulting from the Chicago Board Options Exchange (CBOE) initial public offering," remarked David Fisher, Chief Executive Officer of optionsXpress. "Our powerful, innovative platform and exceptional customer experience continue to attract new customers despite the challenging economic backdrop and declining market indices weighing on the average retail investor. As evidence, we opened our highest number of net new accounts since the second quarter of last year and our customer asset growth exceeded broader market index performance in both the quarter and year-to-date."

For the second quarter, total DARTs were 49,800, a 10% increase from 45,100 during the second quarter of 2009, and up 12% from 44,600 for the first quarter of 2010. Retail DARTs were 32,700 during the second quarter, down 2% from the second quarter of 2009, and up 8% compared to the first quarter. Institutional DARTs were 17,100 during the second quarter, up 44% from the second quarter of 2009, and up 20% from the first quarter.

Total net revenues increased 6% over the second quarter of 2009 and increased 15% when compared to the first quarter of 2010. Resulting net income was $15.6 million, or $0.27 per diluted share, a 3% decrease from the $16.1 million reported in the second quarter of 2009 and a 31% increase when compared to the first quarter of 2010. Second quarter results include approximately $2.2 million in gains and dividends resulting from the CBOE Holdings, Inc. initial public offering. The company owned one seat at the CBOE, for which the company received shares of equity in CBOE Holdings, Inc. at the time of the offering.

"We saw stronger activity throughout our customer base in the second quarter as market activity improved. The increased trading early in the quarter reflected higher customer engagement that tends to develop with more encouraging overall market conditions," commented Adam DeWitt, Chief Financial Officer of optionsXpress. "The higher level of trading also demonstrates the operating leverage in our business as earnings were up 20% sequentially while revenues were only up 11% (both figures before CBOE-related gains)."


Mr. Fisher concluded, "Although economic uncertainty is generating short-term headwinds, our ability to grow our customer base and generate healthy profitability under these difficult market conditions speaks to the appeal of our product offering and the quality of the optionsXpress customer experience. Our efficient operating model positions optionsXpress to benefit substantially from a rebound in trading activity and interest rates while the strength of our balance sheet gives us a strong foundation for future earnings growth.

Read the full statement here:

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