01—Abstract
Summary
Summary of the 10-Q/A filed May 2, 2013. Cited figures are marked; the original filing is the authoritative source.
Cboe Global Markets, Inc. (CBOE) reported solid financial performance for the first quarter of 2012, demonstrating resilience despite a slight dip in overall operating revenues.
While total revenues decreased by 2.1% to $121.4 milliona compared to the prior year's first quarter ($124.0 million), this was largely driven by declines in transaction and access fees. However, significant increases in exchange services and other fees (+57.4%) and market data fees (+25.5%) provided a partial offset. Net income saw a modest increase of 1.5% to $33.4 million, resulting in diluted earnings per share of $0.37, up from $0.36 in the same period last year.
The company also managed to reduce operating expenses by 3.8% to $64.0 millionb, mainly due to lower trading volume incentives and employee costs. CBOE's market share in exchange-traded options contracts grew to 28.1% from 27.2% year-over-year, indicating strong competitive positioning. The company continued its capital return strategy through a share repurchase program, having spent $30.6 million on repurchases in the quarter.
02—Key points
Key Highlights
- Total operating revenues declined slightly by 2.1% to $121.4 million, primarily due to lower transaction and access fees, though offset by growth in exchange services and market data fees.
- Net income increased by 1.5% to $33.4 million, with diluted EPS rising to $0.37 from $0.36 year-over-year.
- Operating expenses decreased by 3.8% to $64.0 million, driven by reduced trading volume incentives and employee costs.
- CBOE's market share in total exchange-traded options contracts increased to 28.1% from 27.2% year-over-year.
- Transaction fees decreased by 5.7% due to lower overall trading volume and a reduction in the average transaction fee per contract.
- The company actively repurchased its stock, spending $30.6 million in the first quarter of 2012 under its $100 million authorization.
- Cash and cash equivalents increased by $13.7 million to $148.6 million, reflecting positive operating cash flow and prepayments.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-Q/AQ1 FY2012filed May 2, 2013Financial Statements
Q1 FY2012 against Q1 FY2011
| Line item | Q1 FY2012Q1 FY2011 | Change |
|---|---|---|
| Revenue | $121.39M$124.04M | −2.1% |
| Operating Expenses | $63.98M$66.51M | −3.8% |
| Operating Income | $57.41M$57.53M | −0.2% |
| Net Income | $33.42M$32.87M | +1.7% |
| EPS (Basic) | $0.37$0.36 | +2.8% |
| EPS (Diluted) | $0.37$0.36 | +2.8% |
| Shares Outstanding (Basic) | 88.15M90.08M | −2.2% |
| Shares Outstanding (Diluted) | 88.15M90.08M | −2.2% |
05—Questions
Frequently Asked Questions
What were the main drivers of the revenue decline in the first quarter of 2012?
The primary drivers for the revenue decline were decreases in transaction fees (down 5.7%) and access fees (down 9.1%). This was mainly attributed to a 3.9% decrease in overall trading volume and a 1.8% reduction in the average transaction fee per contract, influenced by fee structure changes and product mix.
How did CBOE manage operating expenses despite revenue pressures?
CBOE successfully reduced operating expenses by 3.8% through several measures. Key contributors included a significant decrease in trading volume incentives (down 55.2%) and a reduction in employee costs (down 1.6%), partially offset by increases in data processing and outside services.
What is the significance of the increase in CBOE's market share?
The increase in CBOE's market share for exchange-traded options contracts to 28.1% from 27.2% year-over-year is a positive indicator of its competitive strength. This growth, achieved even with a slight overall market volume decrease, suggests CBOE is effectively capturing a larger portion of the available trading activity.
How is CBOE returning capital to shareholders?
CBOE is actively returning capital through its share repurchase program. In the first quarter of 2012, the company repurchased $30.6 million worth of its common stock under its authorized $100 million program. The company also expects to continue paying quarterly dividends, subject to board discretion.
06—Continue