CBOE Reports Record Q1 2016 Results Improving on Q4 2015 Metrics

The strong results paralleled a miss in consensus eps by only one penny.

Chicago-based CBOE Holdings, Inc. which trades on the NASDAQ under ticker symbol CBOE, today reported its first quarter (Q1) financial results for 2016, with net income reaching $49.2 million and up 17% Year-over-Year (YoY), with $0.60 cents per shared on a diluted basis up 20% over the same period, according to a company press release.

The group’s operating revenue for Q1 was $162.3 million, up 14% on a year-over-year basis when compared to $142.8 million reported in Q1 2015. Trading volumes were also higher quarter-over-quarter (QoQ), yet the amount of revenue per contract dipped slightly as the number of trading days were 61 in Q1 compared to 64 during Q4.

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Despite the strong quarter, the earnings per share of 60 cents were a penny short of the 61 cents consensus, and the -2% dip in the company stock price this morning appears to be in line with the broad market and key competitors such as Deutsche Borse which also traded down over 2% this morning, around time of the news.

Source: CBOE Holdings Q1 2016 financials
Source: CBOE Holdings Q1 2016 financials

Commenting in the official press release, CBOE Holdings’ CEO Edward T. Tilly said: “Our first-quarter results reflect the strong contribution and utility of our proprietary products.  S&P 500 Index (SPX) options, Russell 2000 Index (RUT) options and CBOE Volatility Index (VIX) futures and options posted a 28 percent rise in trading volume, significantly outpacing the 3 percent increase reported for multiply-listed options traded industrywide.”

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Mr. Tilly added: “Moreover, our team is energized by the opportunities we see for ongoing growth as a result of advancing our strategy to continue to define and lead the options and volatility space globally, develop unique products, leverage strategic alliances and expand our customer base.”

According to the update, the amount of transaction fees earned rose 20% during Q1 driven by a 19% increase in the average revenue per contract (RPC) even as trading volume of 291.3 million contracts was little-changed comparing YoY.

The higher RPC was said to reflect a shift in the ratio of products traded as a higher proportion of volume came from index options and futures contracts which have the highest RPC, and these product categories represented 42.4% of trading volumes in Q1 2016, compared with 33% YoY.

 

Source: CBOE Holdings
Source: CBOE Holdings
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