Missed earnings estimates
On July 17, Interactive Brokers Group (IBKR) declared its second-quarter earnings. The company’s EPS was $0.39. Interactive Brokers Group missed analysts’ expectations by $0.02. The company ended the second quarter with 542,000 customer accounts, which reflects 27% growth YoY (year-over-year).
In the second quarter, Interactive Brokers Group’s commission revenues declined sequentially due to less movement in the broader market, which resulted in lower trading volumes. The company’s second-quarter commissions were $185 million—compared to $220 million in the first quarter.
Charles Schwab (SCHW) also reported its second-quarter earnings. The company beat the EPS and revenue estimates. In the second quarter, Charles Schwab also witnessed lower trading revenues sequentially.
Beating the revenues estimates
Interactive Brokers Group posted revenues of $445 million in the second quarter, which beat analysts’ estimates by $35.9 million. On July 17, the shares of Interactive Brokers Group rose 3.19% and closed at $64.69. On the same day, shares of other brokerages (VFH) like Charles Schwab, TD Ameritrade (AMTD), and E*TRADE Financial (ETFC) rose 3.56%, 2.18%, and 2.05%, respectively.
The upward movement in TD Ameritrade and E*TRADE Financial’s stock prices reflects investors’ confidence about the companies’ June-quarter earnings. Interactive Brokers Group reported daily average revenue trades of 797,000 in the second quarter, which reflects 19% growth on a YoY basis. During the same period, the company posted customer equity of $134.7 billion, which implies 29% growth YoY.