MW: CBOE profit hurt by lower trading volumes, fees
CBOE Holdings Inc. said Friday that its first-quarter profit slid 13% as trading volume and transaction fees declined from a year earlier.
The company's top- and bottom-line results, though, still beat analysts' expectations.
"Our first-quarter results reflect the impact of lower trading volume experienced at CBOE Holdings and industrywide, as well as a difficult comparison to last year's record first-quarter results," Chief Financial Officer Alan Dean said. The company added that it's adjusting its expense plans for the year in response to current trading volumes.
The Chicago-based company owns the Chicago Board Options Exchange, the world's largest options trading venue, and exclusively lists heavily traded products like options on the S&P 500. Average daily volume slumped 15% to 4.8 million contracts during the period, and total trading volume also declined 15%, to 290.7 million.
In March, CBOE extended trading hours for its volatility index, or VIX, a heavily traded product that is considered a key barometer of investor sentiment. At an industry conference this month, the company identified its VIX product line as "a major opportunity and priority."
CBOE posted $98.7 million in transaction fees for the period, a decrease of 12% from the same period a year ago. Average revenue per contract rose 3%, though.
Busier markets have benefited some market players, but exchange operators have posted mixed first-quarter results. Fellow exchange CME Group Inc. this week said its profit jumped 24% as trading volume rose 10% on record option volume, while Nasdaq OMX Group Inc. reported a profit decline amid lower volume in some trading products.
Overall, CBOE posted a profit of $42.1 million, or 50 cents a share, down from $48.5 million, or 56 cents a share, a year earlier.
Operating revenue fell 10% to $142.8 million.
Analysts, according to Thomson Reuters, anticipated 47 cents in earnings per share and $139.6 billion in revenue.
For the year, the CBOE reduced its guidance for core expenses to $190 million to $194 million, down from its earlier range of $195 million to $199 million.
