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MarketAxess (MKTX) Q3 Earnings Beat Estimates, Down Y/Y
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MarketAxess Holdings Inc. (MKTX - Free Report) reported third-quarter 2021 earnings per share of $1.52, which outpaced the Zacks Consensus Estimate by 7%. However, the bottom line plunged 15% year over year.
The company’s results were impacted by lower revenues and escalating costs. The quarter also witnessed soft secondary trading conditions within global credit trading.
Operational Update
Revenues fell 1.2% year over year to $162.1 million in the quarter under review due to lower commission revenues. However, the top line beat the Zacks Consensus Estimate by 0.7%.
Commission revenues of $142.8 million declined 5.2% year over year. All other revenues comprising information services, post-trade services and other revenues, climbed 44% year over year to $19.3 million.
During the third quarter, the total credit category’s trading volumes inched up 1.3% year over year to $597.1 billion. Rates trading advanced 22.2% year over year to $929.7 billion.
Total expenses of $88.1 million increased 15.6% year over year due to rise in costs related to employee compensation and benefits; depreciation and amortization; technology and communications; and professional and consulting.
Operating income slumped 15.7% year over year to $74 million in the quarter under review.
Operating margin of 45.7% declined by 780 basis points year over year.
MarketAxess Holdings Inc. Price, Consensus and EPS Surprise
The company exited the third quarter with total cash and cash equivalents of $432.7 million, which fell 6.1% from the level as of Dec 31, 2020.
Total assets of $1.6 billion grew 21.1% from the 2020-end figure. Total stockholders’ equity increased 10.5% from the level at 2020 end to $1.1 billion.
During the quarter, the company generated free cash flow of $105.1 million, which dipped 0.1% year over year.
Dividend Update
The company’s board of directors announced a quarterly cash dividend of 66 cents per share, which will be paid out on Nov 17, 2021 to its stockholders of record as of the close of business on Nov 3.
Share Repurchases
In the third quarter, the company bought back 9,189 shares worth $4.2 million.
Expense Outlook Revised for 2021
Expenses are now projected in the range of $360 million to $365 million, which is lower than the prior guidance of $370-$386 million.
Of the finance sector players that have reported third-quarter results so far, the bottom-line results of Synchrony Financial (SYF - Free Report) , Commerce Bancshares, Inc. (CBSH - Free Report) and Nasdaq, Inc. (NDAQ - Free Report) beat the respective Zacks Consensus Estimate.
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MarketAxess (MKTX) Q3 Earnings Beat Estimates, Down Y/Y
MarketAxess Holdings Inc. (MKTX - Free Report) reported third-quarter 2021 earnings per share of $1.52, which outpaced the Zacks Consensus Estimate by 7%. However, the bottom line plunged 15% year over year.
The company’s results were impacted by lower revenues and escalating costs. The quarter also witnessed soft secondary trading conditions within global credit trading.
Operational Update
Revenues fell 1.2% year over year to $162.1 million in the quarter under review due to lower commission revenues. However, the top line beat the Zacks Consensus Estimate by 0.7%.
Commission revenues of $142.8 million declined 5.2% year over year. All other revenues comprising information services, post-trade services and other revenues, climbed 44% year over year to $19.3 million.
During the third quarter, the total credit category’s trading volumes inched up 1.3% year over year to $597.1 billion. Rates trading advanced 22.2% year over year to $929.7 billion.
Total expenses of $88.1 million increased 15.6% year over year due to rise in costs related to employee compensation and benefits; depreciation and amortization; technology and communications; and professional and consulting.
Operating income slumped 15.7% year over year to $74 million in the quarter under review.
Operating margin of 45.7% declined by 780 basis points year over year.
MarketAxess Holdings Inc. Price, Consensus and EPS Surprise
MarketAxess Holdings Inc. price-consensus-eps-surprise-chart | MarketAxess Holdings Inc. Quote
Financial Update (as of Sep 30, 2021)
The company exited the third quarter with total cash and cash equivalents of $432.7 million, which fell 6.1% from the level as of Dec 31, 2020.
Total assets of $1.6 billion grew 21.1% from the 2020-end figure. Total stockholders’ equity increased 10.5% from the level at 2020 end to $1.1 billion.
During the quarter, the company generated free cash flow of $105.1 million, which dipped 0.1% year over year.
Dividend Update
The company’s board of directors announced a quarterly cash dividend of 66 cents per share, which will be paid out on Nov 17, 2021 to its stockholders of record as of the close of business on Nov 3.
Share Repurchases
In the third quarter, the company bought back 9,189 shares worth $4.2 million.
Expense Outlook Revised for 2021
Expenses are now projected in the range of $360 million to $365 million, which is lower than the prior guidance of $370-$386 million.
Zacks Rank
MarketAxess has a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Finance Sector Releases
Of the finance sector players that have reported third-quarter results so far, the bottom-line results of Synchrony Financial (SYF - Free Report) , Commerce Bancshares, Inc. (CBSH - Free Report) and Nasdaq, Inc. (NDAQ - Free Report) beat the respective Zacks Consensus Estimate.