Interactive Brokers Reports Mixed Q2 2014 Metrics, Volumes Retreat -5% QoQ

Interactive Brokers Group Inc. has announced the release of its Q2 financial metrics ending June 30, 2014, which were highlighted by a decrease of trade volumes to the tune of -5% QoQ, according to an Interactive Brokers' statement.

Interactive Brokers deals with a multitude of asset classes, with a particular penchant for Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term trading. On the heels of relatively upbeat Q1 metrics, Q2 appears to be less optimistic, namely as the industry grapples highly tranquil markets. In terms of non-comprehensive figures, the company revealed earnings per share of $0.26 at the end of Q2 2014, relative to $0.21 at the end of Q2 2013, or a 23.8% gain YoY.

Trade Volumes Decline QoQ

Total trades for Q2 2014 were reported at 67,808, which declined -5% QoQ from 71,232 in Q1 2014. Additionally, the total average trades per day came in at 1,076 in Q2 2014, down -7.9% QoQ from 1,168 in Q1 2014.

Moreover, the following financial figures were released for the Q2 2014.

• 56% pretax profit margin for this quarter, up from 47% YoY from Q2 2013
• 60% Electronic Brokerage pretax profit margin for this quarter
• Customer equity growth of 44% YoY to $53.9 billion
• Customer debits increased by 30% YoY to $14.4 billion
• Customer accounts rose 17% YoY to 262,000
• Total DARTs jumped 5% YoY to 529,000
• Brokerage segment equity came in at $2.7 billion
• Total equity was $5.3 billion

Foreign Currency Diversification Continues to Rise in Q2

Based on a basket of 16 major currencies, Interactive Brokers’ currency diversification program grew its comprehensive earnings by $26 million in Q2, compared to a growth of $24 million in Q1 (8.3% growth QoQ), having seen the US dollar value of the GLOBAL increased by 0.5%.

Electronic Brokerage Reports Mixed Figures in Q2

Notable increases were also seen in the company’s other operations, such as in Electronic Brokerage, with income before income taxes which came in at $131 million (7% gain YoY). However, commissions and execution fees revealed a solid double-digit decline in the neighborhood of -10% YoY, due in large part to lower customer FX volumes and near historic volatility in the overall market.

Meanwhile, total daily average revenue trades (DARTS) were reported at 529,000 in Q1 2014, compared to 582,000 in Q2 2013 or -9.1% YoY. In addition, cleared DARTs numbered only 484,000 during Q2 2014, down -8.0% YoY from 527,000 in Q2 2013. However, there was an exhibited growth in total accounts, which came in at 262,000 (4% YoY), compared to 252,000 at the end of Q1 2013. This advance was also seen across the size of customer accounts, which grew to $206,000 in equity per cleared customer in Q2 2014.

Shareholders’ Focus

In terms of shareholders, Interactive Brokers (IBKR:NASDAQ) again declared a quarterly dividend of $0.10 per share. The dividend is payable on September 12, 2014, to shareholders of record as of August 29, 2014. According to Forex Magnates' research, the stock presently trades at $23.40 per share at the time of writing during after hours – the stock is well positioned with a P/E ratio of 24.83 and still sits below its 52-week high of $25.03.