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Interactive Brokers (IBKR) Stock Declines on Q1 Earnings Miss

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Shares of Interactive Brokers Group (IBKR - Free Report) lost 1.5% in after-market trading following the release of its first-quarter 2022 results. Adjusted earnings per share of 82 cents missed the Zacks Consensus Estimate by a penny. The bottom line reflects a decline of 16.3% from the prior-year quarter.

The company recorded a decline in revenues in the quarter under review. A fall in daily average revenue trades (DARTs) further hurt results. However, the capital position remained strong. Lower expenses were a tailwind.

After considering non-recurring items, net income available to common shareholders (GAAP basis) was $73 million or 74 cents per share, down from $107 million or $1.16 per share in the prior-year quarter.

Interactive Brokers reported comprehensive income available to common shareholders of $63 million or 64 cents per share compared with $90 million or 98 cents per share in the prior-year quarter.

Revenues & Expenses Decline

Total GAAP net revenues were $645 million, down 27.8% year over year. The top line missed the Zacks Consensus Estimate of $705 million. Adjusted net revenues were $692 million, down 13.1%.

Total non-interest expenses declined 1.2% year over year to $251 million. The fall was due to a decrease in general and administrative costs, and customer bad debt.

Income before income taxes was $394 million, down 38.3% from the prior-year quarter.

The adjusted pre-tax profit margin was 64%, down from 68% a year ago.

In the reported quarter, total customer DARTs declined 24% year over year to 2.52 million. Total cleared DARTs decreased from 2.96 million to 2.23 million.

Customer accounts grew 36% from the year-ago quarter to 1,809,000.

Capital Position Strong

As of Mar 31, 2022, cash and cash equivalents (including cash and securities set aside for regulatory purposes) totaled $51.60 billion compared with $40.40 billion as of Dec 31, 2021.

As of Mar 31, 2022, total assets were $114.42 billion compared with $109.11 billion as of Dec 31, 2021. Total equity was $10.48 billion, up from $10.22 billion as of Dec 31, 2021.

Our Viewpoint

Interactive Brokers' efforts to develop proprietary software and an increase in emerging market customers are expected to keep aiding financials. Also, its efficient capital deployment activities indicate strong liquidity and capital positions.

Interactive Brokers Group, Inc. Price, Consensus and EPS Surprise

 

Interactive Brokers Group, Inc. Price, Consensus and EPS Surprise

Interactive Brokers Group, Inc. price-consensus-eps-surprise-chart | Interactive Brokers Group, Inc. Quote

Currently, Interactive Brokers carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance and Upcoming Releases of Other Companies

Charles Schwab’s (SCHW - Free Report) first-quarter 2022 adjusted earnings of 77 cents per share missed the Zacks Consensus Estimate of 85 cents. The bottom line declined 8% from the prior-year quarter.

SCHW’s results were hurt by increased market volatility, thereby affecting trading income. Also, higher expenses were a headwind. However, lower fee waivers and growth in brokerage account number acted as tailwinds for Schwab in the quarter.

Raymond James (RJF - Free Report) is scheduled to announce quarterly numbers on Apr 27.

Over the past 30 days, the Zacks Consensus Estimate for Raymond James’ quarterly earnings has been revised 4.7% lower to $1.62, suggesting a 3% decrease from the prior-year reported number.

LPL Financial (LPLA - Free Report) is slated to announce first-quarter 2022 numbers on Apr 28.

Over the past 30 days, the Zacks Consensus Estimate for LPL Financial’s quarterly earnings has moved 3.6% south to $1.90, implying a 7.3% rise from the prior-year reported number.