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Interactive Brokers Group Missed Earnings Estimates in Q2 2018

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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.

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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.

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