Interactive Brokers (IBKR) reported first quarter diluted earnings per share of 35 cents comprehensive basis. In the first quarter of 2013, Interactive Brokers earned just 6 cents per share. On a non-comprehensive basis, which excludes the effect of the U.S. dollar value of the company’s non-U.S. subsidiaries, earnings were reported at 34 cents per share compared to 14 cents last year. Analysts were expecting the company to report a profit of 30 cents per share.The company reported revenue of $354.9 million, which was a 64% higher than last year’s revenue number. Analysts were expecting $322 million in revenue from Interactive Brokers.
Interactive Brokers clearly knocked the cover off the ball with this first quarter earnings release. What were the driving forces behind this big earnings beat? Daily Average Revenue Trades (DARTs) came in at 582,000, which was a significant 25% jump over last year. Customer accounts grew 16% from last year. The pre-tax profit margin at Interactive Brokers jumped to 61% from just 38% in the first quarter last year.
The best news of all for Interactive Brokers was both of their major segments contributed in a positive way to this earnings number. The electronic brokerage segment, which has been strong for quite some time, reported earnings that rose 21% from last year. Revenue moved up 15% in this division. The Market Making segment of the company has been a drag for a long time, but that segment turned around nicely this quarter. This segment earned $88 million in income before taxes in this quarter, compared to a loss of $29 million last year. Revenue here surged to $133.1 million from just $23.6 million last year.
Not surprisingly, the market responded very positively to this earnings release. Shares of IBKR are trading about 13 percent than they were a week ago.
For the full press release on this earnings report click here.