Interactive brokers group announces 1q2011 results
Greenwich, conn.--(business wire)--interactive brokers group, inc. (nasdaq gs: ibkr) an automated global electronic market maker and broker, today reported diluted earnings per share of $0.38 for the quarter ended march 31, 2011, compared to diluted earnings per share of $0.09 for the same period in 2010. reported results reflect the gaap convention that shifts currency hedging results from reportable earnings to other comprehensive income, which is reported in the statement of financial condition. the company considers this item to be material to the operating results. including the effects of currency translation, the company estimates, on a non-gaap basis, diluted earnings per share of $0.41 for the quarter ended march 31, 2011 ($0.06 for the same period in 2010). net revenues were $368 million and income before income taxes was $222 million for this quarter, compared to net revenues of $211 million and income before income taxes of $65 million for the same period in 2010. adjusted for the currency reporting convention described above, on a non-gaap basis, first quarter 2011 net revenues were $387 million ($190 million for the same period in 2010) and first quarter 2011 income before income taxes was $241 million ($44 million for the same period in 2010). the interactive brokers group, inc. board of directors today declared a quarterly cash dividend of $0.10 per share. this dividend is payable on june 14, 2011 to shareholders of record as of may 27, 2011. business highlights 60% pretax profit margin for this quarter (62% on a non-gaap basis). 67% market making pretax profit margin for this quarter (69% on a non-gaap basis). 55% electronic brokerage pretax margin for this quarter. customer equity increased 49% from the year-ago quarter to $24.8 billion and customer accounts increased 20%. cleared darts increased 18% from the year-ago quarter to 387,000. market making pretax income increased from $6 million to $135 million from the year-ago quarter (increased from $16 million loss to $153 million income on a non-gaap basis). "the spectacular growth of our brokerage business has continued unabated in the first quarter of 2011, proving that when you offer more value at lower cost people do notice," said thomas peterffy, our ceo. “as analysts correctly estimated, the weak dollar contributed approximately $54 million, or 24%, of our pretax earnings on a gaap basis. today we are announcing our intention to pay a regular quarterly dividend of 10 cents per share." segment overview electronic brokerage electronic brokerage segment income before income taxes grew 40% in the quarter ended march 31, 2011 compared to the same period in 2010. commissions and execution fees grew by 19% and net interest income increased 89% from the same quarter last year. customer accounts grew 20% to 168,000 and customer equity grew 49% to $24.8 billion. pretax profit margin increased from 51% to 55% for the quarter ended march 31, 2011 from the same period in 2010. total darts(1) for cleared and execution-only customers increased 16%, to 423,000 from the year-ago quarter. cleared darts were 387,000 in this quarter, 18% higher than the same period last year. market making market making segment income before income taxes increased from $6 to $135 million (from -$16 to $153 million on a non-gaap basis) for the quarter ended march 31, 2011 from the same period in 2010. pretax profit margin expanded to 67% (69% on a non-gaap basis) in this quarter from 7% (-25% on a non-gaap basis) in the quarter ended march 31, 2010. the environment for market makers improved this quarter with wider spreads and higher actual to implied volatility ratios. our currency hedging program contributed to our profits as the u.s. dollar value of the global basket of currencies in which we hold our equity increased by approximately 1.7% in this quarter. market making options contract volume decreased by 5% and futures volume increased by 12% from the year-ago quarter. effects of non-gaap measures non-gaap measures are used to isolate items that the company’s management views as non-operating in nature or as material to operating results but not otherwise reported therein. presentation of non-gaap measures is intended to give a clearer presentation of operating results. given the material impact on our reported financial results, the following non-gaap measure is presented for the current period: in connection with our currency hedging strategy, we have determined to base our net worth in globals, a basket of major currencies in which we hold our equity. pursuant to gaap convention, a portion of our currency translation gains and losses is reported as other comprehensive income in the statement of financial condition. this income is, in effect, shifted from the reported earnings to the statement of financial condition. the purpose of this non-gaap measure is to report all currency translation gains and losses as if they were included in the statement of income. this analysis contains certain assumptions about tax rates and should, therefore, be considered an estimate. management believes that it is appropriate to include this item in the statement of income in order to achieve a proper representation of the company’s financial performance. please see the tables at the end of this release for the reconciliation of our gaap to non-gaap results. (1) daily average revenue trades (darts) are based on customer orders. conference call information: interactive brokers group will hold a conference call with investors today, april 21, 2011, at 11:00 a.m. et to discuss its first quarter 2011 results. investors who would like to listen to the conference call live should dial 877-324-1965 (u.s. domestic) and 631-291-4512 (international). the number should be dialed approximately ten minutes prior to the start of the conference call. ask for the “interactive brokers conference call.” the conference call will also be accessible simultaneously, and through replays, as an audio webcast through the investor relations section of the interactive brokers web site, www.interactivebrokers.com/ir. about interactive brokers group, inc.: interactive brokers group, inc., together with its subsidiaries, is an automated global electronic market maker and broker specializing in routing orders and executing and processing trades in securities, futures, foreign exchange instruments, bonds and funds on more than 90 electronic exchanges and trading venues around the world. as a market maker, we provide liquidity at these marketplaces and, as a broker, we provide professional traders and investors with electronic access to stocks, options, futures, forex, bonds and mutual funds from a single ib universal accountsm. employing proprietary software on a global communications network, interactive brokers is continuously integrating its software with a growing number of exchanges and trading venues into one automatically functioning, computerized platform that requires minimal human intervention. cautionary note regarding forward-looking statements: the foregoing information contains certain forward-looking statements that reflect the company's current views with respect to certain current and future events and financial performance. these forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the company's operations and business environment which may cause the company's actual results to be materially different from any future results, expressed or implied, in these forward-looking statements. any forward-looking statements in this release are based upon information available to the company on the date of this release. the company does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any statements expressed or implied therein will not be realized. additional information on risk factors that could potentially affect the company's financial results may be found in the company's filings with the securities and exchange commission. period trades change trades change trades change trades change trading day period (contracts) change (contracts) change (shares) change period (contracts) change (contracts) change (shares) change period (contracts) change (contracts) change (shares) change ** in brazil, an equity option contract typically represents 1 share of the underlying stock; however, the typical minimum trading quantity is 100 contracts. to make a fair comparison to volume at other exchanges, we have adopted a policy of reporting brazilian equity options contracts divided by their trading quantity of 100. period (contracts) change (contracts) change (shares) change 1q2011 1q2010 % change (in $'s, except dart per account) interactive brokers group, inc. and subsidiaries segment financial information (unaudited) $ 134.6 interactive brokers group, inc. and subsidiaries consolidated statements of income (unaudited) total revenues net income attributable to non-controlling interests interactive brokers group, inc. and subsidiaries condensed consolidated balance sheets (unaudited) interactive brokers group, inc. and subsidiaries gaap to non-gaap performance measures reconciliation (unaudited) (a) reporting the effect of currency rate changes on the company's financial statements directly through equity as a component of other comprehensive income is a u.s. gaap reporting convention. management measures the company's performance by including such currency effects in trading gains, a component of net revenues, and in income, net of the effective tax rates paid by foreign subsidiaries and net of u.s. corporate taxes on the company's share of such income. the combined effective tax rate for foreign subsidiaries was 23.5% and 17.2% for the quarter ended march 31, 2011and 2010, respectively. the company's effective u.s. corporate tax rate was 36.8%. interactive brokers group, inc. market making segment gaap to non-gaap performance measures reconciliation (unaudited) (a)
