CBOE Holdings Q4 Results Top Estimates

(RTTNews) - CBOE Holdings, Inc. (CBOE), the largest U.S. options exchange operator, reported Friday a profit for the fourth quarter that grew 16 percent from last year, reflecting improved margins and revenue growth amid higher transaction fees and volumes. Both adjusted earnings per share and quarterly revenues topped analysts expectations.

The Chicago, Illinois-based company, the parent of the Chicago Board Options Exchange, reported net income of $45.64 million or $0.52 per share for the fourth quarter, 16 percent higher than $39.25 million or $0.45 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $45.6 million or $0.52 per share, compared to $38.9 million or $0.45 per share in the year-ago quarter.

On average, 15 analysts polled by Thomson Reuters expected the company to report earnings of $0.48 per share for the quarter. Analysts' estimates typically exclude special items.

Total operating revenue for the quarter grew 9 percent to $141.83 million from $130.08 million in the same quarter last year, and topped fourteen Wall Street analysts' consensus estimate of $141.69 million by a whisker.

The revenue growth represents 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, partially offset by a decline of $0.7 million in access fees.

Operating margin for the quarter improved 530 basis pints to 51.2 percent from last year's 45.9 percent.

Transaction fees for the quarter increased 9 percent to $99.03 million as total trading volume rose 22 percent to 313.0 million contracts, partially offset by a 11 percent decline in the average revenue per contract or RPC, to $0.316. Average daily volume increased 18 percent to 4.89 million contracts per day from last year.

However, average revenue per contract or RPC declined 11 percent from the prior-year quarter to $0.316.

On Wednesday, the company's board of directors declared a quarterly dividend of $0.18 per share, payable on March 21 to stockholders of record on February 28, 2014.

"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," Edward Tilly said in a statement.

For fiscal 2013, the company reported net income of $173.86 million or $1.99 per share, 12 percent higher than $155.25 million or $1.78 per share in the prior year. Excluding items, adjusted net income for the year was $177.4 million or $2.03 per share, compared to $147.5 million or $1.69 per share in the year ago.

Total operating revenue for the full year grew 12 percent to $572.05 million from $512.34 million in the previous year.

Street was looking for full-year 2013 earnings of $1.99 per share on annual revenues of 571.28 million.

Looking ahead to fiscal 2014, CBOE forecasts core operating expenses in a range of $191 million to $196 million. The company also projects capital expenditures in the range of $47.0 million to $50.0 million.

"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," Tilly added.

CBOE closed Thursday's regular trading session at $51.68, up $0.68 on a volume of 0.66 million shares. In the past 52-week period, the shares have been trading in a broad range of $33.64 to $54.79.