On Friday, CBOE Holdings, Inc.?(NASDAQ:?CBOE) announced its fourth-quarter results represented its best ever along with record revenue and earnings for the full-year 2013. This represented the third straight year of record financial results.?
For the quarter, the company reported GAAP net income allocated to common stockholders of?$45.6 million ($0.52?per diluted share), compared with?$39.2 million ($0.45?per diluted share), in the fourth quarter of 2012.? On an adjusted basis, net income allocated to common stockholders was?$45.6 million ($0.52?per diluted share), compared with?$38.9 million ($0.45?per diluted share), in the prior year period.? Operating revenue for the fourth quarter was?$141.8 million, up 9 percent compared to 2012’s fourth quarter $130.1 million.?
For the year ended December?31, 2013, GAAP net income allocated to common stockholders rose 12 percent to?$173.9 million($1.99?per diluted share), on total operating revenue of?$572.1 million.? For the comparable 2012 period, the company reported GAAP net income allocated to common stockholders of?$155.3 million ($1.78?per diluted share), on operating revenue of?$512.3 million.?
On an adjusted basis, net income allocated to common stockholders increased 20 percent to?$177.4 million?from?$147.5 million?in 2012, and adjusted diluted earnings per share grew 20 percent to?$2.03?from?$1.69?in 2012. ?
A Look at Revenues
For CBOE’s fourth quarter 2013 operating revenues, they increased by?$11.7 million (9 percent) to?$141.8 million?from?$130.1 million?in 2012’s fourth quarter.? The increase primarily reflects higher revenue of?$8.2 million?in transaction fees,?$1.5 million?in market data fees,?$1.3 million?in exchange services and other fees and$1.1 million?in regulatory fees, offset somewhat by a decrease of?$0.7 million?in access fees.?
CBOE’s largest revenue driver, transaction fees, increased 9 percent for the quarter as a result of a 22 percent increase in trading volume, offset somewhat by an 11 percent decrease in the average revenue per contract (RPC) compared with the fourth quarter of 2012.? Total trading volume for the fourth quarter was 313.0 million contracts, or 4.89 million contracts per day, compared with 255.7 million contracts, or 4.13 million contracts per day, in 2012’s fourth quarter.? RPC for the quarter was?$0.316?compared with?$0.355?in the fourth quarter of 2012.?
Edward T. Tilly,?CBOE Holdings?Chief Executive Officer, said in a press release, “We are pleased to report a strong finish to 2013, which marked our third consecutive year of record revenue and earnings. Our record performance illustrates the strength of our proprietary products and our successful efforts to expand?CBOE’s?global customer base. As we begin 2014, we are particularly excited about our new product pipeline, starting with the launch of futures on the CBOE Short-Term Volatility IndexSM?(VXSTSM?Index) later this month.? We will continue to build on our success in shaping the options and volatility space, with an ongoing focus on delivering value to stockholders and our customers.”?
Alan J. Dean,?CBOE Holdings?Executive Vice President and Chief Financial Officer, added,?”We had a solid fourth quarter with year-over-year revenue growth of 9 percent and diluted EPS growth of 16 percent.? For the full-year 2013, we generated?$224 million?in cash flow from operations, returned nearly?$110 million?in capital to our stockholders through dividends and share repurchases and expanded our adjusted operating margin to a new annual high of 50.8 percent.? The company is well-positioned both financially and operationally, with strong cash flow, a strong balance sheet and positive momentum heading into 2014.”