Interactive Brokers (IBKR) Profits Higher Q3, Revenues Declining Y / Y
Group of interactive brokersIBKR’s adjusted third-quarter 2021 earnings per share of 78 cents topped Zacks’ consensus estimate of 75 cents. The net result reflects a growth of 47.2% compared to the quarter of the previous year.
The company saw lower revenues and increased expenses during the quarter. Nonetheless, an increase in Daily Average Income Exchanges (DART) was observed which helped the results to some extent. Capital ratios also remained strong.
After examining non-recurring items, net income available to common shareholders (GAAP basis) was $ 42 million or 43 cents per share, compared to $ 46 million or 58 cents per share in the prior year quarter.
Interactive Brokers reported comprehensive income available to common shareholders of $ 33 million or 34 cents per share in the current quarter, compared to $ 54 million or 69 cents recorded in the previous year quarter.
Decrease in income, increase in expenses
Total net GAAP revenue was $ 464 million, down 15.3% year over year. The first line missed Zacks’ consensus estimate of $ 633 million. Adjusted net revenue was $ 650 million, up 25.5%.
Total non-interest expense increased 7.5% year over year to $ 230 million. The increase is due to an increase in all cost components except fulfillment, clearing and distribution costs and bad debts from customers.
Earnings before income taxes were $ 234 million, down 29.9% from the prior year quarter.
The adjusted pre-tax profit margin was 65%, up from 59% a year ago.
During the current quarter, the total number of DART customers increased 24% year-on-year to 2.26 million. The total authorized DARTs increased from 1.63 million to 2.02 million.
In addition, accounts receivable increased 57% from the last quarter to reach 1,536,000.
Strong capital position
As of September 30, 2021, cash and cash equivalents (including cash and securities set aside for regulatory purposes) were $ 40.4 billion, compared to $ 48 billion as of December 31, 2020.
As of September 30, 2021, total assets were $ 106.3 billion, compared to $ 95.7 billion as of December 31, 2020. Total equity was $ 10 billion, compared to $ 9 billion. dollars as of December 31, 2020.
Our point of view
Interactive Brokers‘ efforts to develop proprietary software and an increase in the number of clients in emerging markets should help finance. In addition, its efficient capital deployment activities indicate strong liquidity and capital position.
Interactive Brokers Group, Inc. Price, Consensus and EPS Surprise
Interactive Brokers Group, Inc. price-consensus-eps-surprise-chart | Estimate Interactive Brokers Group, Inc.
Currently, Interactive Brokers carries a Zacks Rank # 2 (Buy). You can see The full list of today’s Zacks # 1 Rank (Strong Buy) stocks here.
Performance and upcoming releases from other companies
Charles SchwabSCHW’s adjusted third-quarter 2021 earnings of 84 cents a share topped Zacks’ consensus estimate of 80 cents. Net income jumped 65% from the previous year quarter.
Raymond James RJF and LPL Financial The LPLA will publish quarterly issues on October 27 and 28, respectively.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.