CBOE Holdings, Inc. (NASDAQ: CBOE) has reported its first quarter profit increased 16% on rising exchange transaction fees and trading volume.
CBOE saw record earnings of $48.5 million, or $0.56 per diluted share, for the first quarter of 2014, compared with $41.8 million, or $0.48 per diluted share, from 2013’s first quarter of 2013.
Excluding items, adjusted earnings rose to $50.0 million, or $0.58 per diluted share, compared with $43.9 million, or $0.50 per diluted share, in the same period last year.
Operating revenue for the quarter was $157.9 million, up 11 percent compared with $142.7 million in the first quarter of 2013.
Analysts had estimated earnings of 56 cents a share and $157 million in revenue.?
Edward T. Tilly, CBOE Holdings Chief Executive Officer, said,?”We experienced double-digit increases in trading volume across each of our product categories during the first quarter, resulting in record revenue and earnings. We were particularly pleased with the continued growth in our volatility products, with average daily trading volume in VIX options up 22 percent and VIX futures up 33 percent during the first quarter. More important, we are excited about the opportunities ahead to further develop new proprietary products and broaden our customer reach.”
Alan J. Dean, CBOE Holdings Executive Vice President and Chief Financial Officer, added,?”I am very pleased with our financial results this quarter, which firmly demonstrate the leverage we are able to capture as we grow our top-line and remain diligent in controlling expenses. We achieved an adjusted operating margin for the quarter of 53.6 percent, a new all-time high.”
First quarter average daily volume was 5.6 million contracts, up 29% from last year’s 4.37 million contracts. Total trading volume of 342.8 million contracts rose 31% from 2013’s 262 million contracts.?
Transaction fees rose 14% to $112.8 million from trading volume increases.
First Quarter 2014 Operational Highlights and Recent Developments
- On May 1, the company reported that average daily volume (ADV) for total options in April 2014 was 4.93 million contracts, a 1 percent decrease from March 2014 ADV of 4.95 million contracts and a 10 percent increase from April 2013 ADV of 4.48 million contracts. In addition, CFE reported ADV of 178,438 contracts in April 2014, a 4 percent decrease compared with 184,938 contracts per day during April 2013 and a 3 percent decrease from 183,863 contracts per day in March 2014.
- On April 10, trading of CBOE Short-Term Volatility IndexSM?(VXSTSM?Index or “Short-Term VIX Index”) options with weekly expirations launched, totaling 3,134 contracts for first-day trading volume. Futures on the Short-Term VIX Index launched February 13, 2014.
- On March 18, at its 30th Annual Risk Management Conference, the company announced that it plans to extend trading hours for CBOE Volatility Index??(VIX??Index) futures to nearly 24 hours a day, five days a week, beginning June 22, 2014, pending regulatory review.
- On March 12, the company announced plans to invest in Tradelegs, the developer of advanced decision-support software that institutional investors can employ to optimize investment performance.