Interactive Brokers (IBKR) reported comprehensive diluted income of 23 cents per share in the third quarter. That’s much better than their loss of 13 cents per share a year ago. Still, analysts had been expecting 32 cents per share from the company. Revenues came in at $359 million, up from just $171 million a year ago, but a little bit short of projections of $371 million in revenues. Notably, total non-interest expenses were up 20 percent from a year ago to $157 million.
Customer account growth was very strong in the third quarter. Growth in customer accounts came in at an impressive 18 percent vs. the same quarter a year ago. What about the all important Daily Average Revenue Trades (DARTs)? DARTs were up 28 percent compared to a year ago at 620,000, which was 11 percent higher than the second quarter. The market volatility in the third quarter helped this figure.
The market making segment of the company reported net revenue of $90 million, up 84 percent from a year ago. Pre-tax margin in this area stood at 51 percent compared to just 14 percent last year. The extreme volatility in late-August drove this growth. The electronic brokerage area reported a 22 percent rise in revenues to $300 million. Pre-tax profit margin came in at 61 percent, down slightly from last year’s 63 percent figure. Paul Brody, CFO of Interactive Brokers, said the decrease was primarily due to currency movements.
Shares of IBKR dropped more than 5 percent on Wednesday following the release of this report. That’s likely some profit taking after the stock has gained more than 50 percent in the past year.
Click here for the full press release.