MarketAxess Reports, Beats

MarketAxess Holdings Inc. (MKTX - Snapshot Report) reported second quarter earnings of 34 cents per share, beating the Zacks Consensus Estimate of 32 cents per share as well as the year-ago quarter earnings of 30 cents per share. Net income for the company came in at $12.6 million, increasing 5.8% over the year-ago quarter.

Operational Update

Total revenue as reported by MarketAxess for the second quarter amounted to $48.8 million, in line with the Zacks Consensus Estimate but increasing 6.6% from $45.8 million in the year-ago quarter. The increase was primarily attributable to the increase in commission earned by the company due to increased trading volumes, increase in information and user access fees and other revenues earned.

Total expenses escalated 6.7% year over year to $27.6 million in the second quarter due to increase in technology and communications expenses, general administrative expenses and expenses related to marketing and advertisement.

Total volumes traded on the exchange amounted to $144.8 billion, an increase of almost 9% from $133.0 billion traded in the year-ago quarter.

Financial Position

Cash and cash equivalents for MarketAxess at quarter end decreased 23.6% to $129.6 million from $169.6 million as of 2011-end. Total assets with the company at the end of the second quarter amounted to $289.7 billion, declining 17.1% from $349.5 billion as of December 31, 2011. Also, shareholders’ equity of $261.7 million decreased 16.2% from $312.4 million as of 2011-end.

Dividend

The board of MarketAxess declared a cash dividend of 11 cents per share, which will be paid on August 23, 2012 to shareholders of record as on August 9, 2012.

Peer Take

NASDAQ OMX Group Inc. (NDAQ - Analyst Report), one of the peers of the company, reported its second quarter results yesterday. The operating earnings per share of 64 cents surpassed both the Zacks Consensus Estimate of 60 cents and the prior-year quarter’s earnings of 62 cents a share.

Total net exchange revenues edged up 2.2% year over year to $424 million, and also surpassed the Zacks Consensus Estimate of $416 million. The upside was primarily attributable to improved revenue from market services, although issuer services and market technology revenues remained sluggish.

Zacks Rank

MarketAxess carries a Zacks #3 Rank, implying a short-term Hold rating.