Interactive Brokers Group Announces 3Q09 Results.
Reports Income before Taxes of $133 Million on $272 Million in Net Revenues, Earnings Per Share of $0.20
GREENWICH, Conn. -- Interactive Brokers Group, Inc. (NASDAQ NASDAQ
in full National Association of Securities Dealers Automated Quotations
U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on GS: IBKR) an automated global electronic market maker and broker, today reported diluted earnings per share diluted earnings per share
An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $0.20 for the quarter ended September 30, 2009, compared to diluted earnings per share of $0.65 for the same period in 2008.
Net revenues were $272 million and income before income taxes was $133 million for this quarter, compared to net revenues of $497 million and income before income taxes of $348 million for the same period in 2008.
* 49% pre-tax profit margin for this quarter.
* $4.8 billion in equity.
* 20% increase in customer accounts and 43% increase in customer equity from the year ago quarter.
* YTD See Year-to-date.
See year to date (YTD). cleared DARTs grew to 318,000.
* 51% Electronic Brokerage pre-tax margin for this quarter.
* 49% Market Making pre-tax margin for this quarter.
"Ever increasing competition in the transparent, exchange listed derivatives markets continued to pressure spreads to never before seen levels in the third quarter," said Thomas Peterffy Thomas Peterffy is the founder and CEO of Interactive Brokers (Nasdaq: IBKR). He is a Hungarian immigrant to the United States. Peterffy originally worked as a computer programmer. He founded Interactive Brokers in 1977. , our CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "These ultra low transaction costs Transaction Costs
Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). in exchange listed products will inevitably be followed by higher trading volumes Trading volume
The number of shares transacted every day. As there is a seller for every buyer, one can think of the trading volume as half of the number of shares transacted. That is, if A sells 100 shares to B, the volume is 100 shares. and better customer performance."
Market Making segment income before income taxes decreased 47% in the quarter ended September 30, 2009 compared to the prior quarter and decreased 74% from the same period last year. Pre-tax margin was 49% in this quarter, down from 79% in the same period last year. Compared to last year, 2009 presented a less favorable environment for market makers due to tighter bid/offer spreads on option exchanges. We managed our risk by continuing to avoid counterparty risks Counterparty Risk
The risk to each party of a contract that the counterparty will not live up to their contractual obligations.
In most financial contracts, counterparty risk is known as default risk. and balance sheet exposure Balance sheet exposure
See: Accounting exposure. from illiquid Illiquid
An asset or security that cannot be converted into cash very quickly (or near prevailing market prices).
A house is a good example of an illiquid asset.
See also: Cash, Liquidity
In the context of finance. positions by making markets primarily in exchange traded products that are cleared through central clearing houses. Market Making options contract volume remained flat during this quarter compared to the same period last year.
Electronic Brokerage segment income before income taxes decreased 3% in the quarter ended September 30, 2009 compared to the same period in 2008 and was roughly flat to the prior quarter. This decrease is attributable to lower commissions from futures and lower net interest income which was affected by historically low Fed Funds fed funds
See federal funds. rates. Customer accounts grew 20% to 128,000 and customer equity grew 43% to $13.4 billion, while YTD cleared DARTs* modestly increased by 3% to 318,000 as of September 30, 2009 compared to the same period in 2008. Pre-tax margin increased from 47% to 51% for the quarter ended September 30, 2009 from the same period in 2008.
* Daily average revenue trades (DARTs) are based on executed customer orders.
Conference Call Information:
Interactive Brokers Group will hold a conference call with investors today, October 22, 2009, at 5:00 p.m. ET to discuss its third quarter results. Investors who would like to listen to the conference call live should dial 800-750-4984 (U.S. domestic) and 913-312-4376 (international). The number should be dialed approximately ten minutes prior to the start of the conference call. Ask for the "Interactive Brokers Conference Call."
The conference call will also be accessible simultaneously, and through replays, as an audio webcast through the Investor Relations Investor relations
The process by which the corporation communicates with its investors. section of the Interactive Brokers web site, www.interactivebrokers.com/ir.
About Interactive Brokers Group, Inc.:
Interactive Brokers Group, Inc., together with its subsidiaries, is an automated global electronic market maker and broker specializing in routing orders and executing and processing trades in securities, futures and foreign exchange instruments on more than 80 electronic exchanges and trading venues around the world. As a market maker, we provide liquidity at these marketplaces and, as a broker, we provide professional traders and investors with electronic access to stocks, options, futures, forex, bonds and mutual funds from a single IB Universal Account(SM). Employing proprietary software on a global communications network Global Communications Network or (GCN) is an instant messaging client for Microsoft Windows. The software is provided free of charge but is supported by banner advertisements. In addition to chat services, users are also provided with free e-mail and webspace. , Interactive Brokers Group continuously integrates its software with a growing number of exchanges and trading venues into one automatically functioning, computerized platform that requires minimal human intervention.
Cautionary Note Regarding Forward-Looking Statements:
The foregoing information contains certain forward-looking statements that reflect the company's current views with respect to certain current and future events and financial performance. These forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to relating to relate prep → concernant
relating to relate prep → bezüglich +gen, mit Bezug auf +acc the company's operations and business environment which may cause the company's actual results to be materially different from any future results, expressed or implied, in these forward-looking statements. Any forward-looking statements in this release are based upon information available to the company on the date of this release. The company does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any statements expressed or implied therein will not be realized. Additional information on risk factors that could potentially affect the company's financial results may be found in the company's filings with the Securities and Exchange Commission.
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