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MarketAxess (MKTX) Q2 Earnings Beat on Solid Trading Volume

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MarketAxess Holdings Inc. (MKTX - Free Report) second-quarter 2017 earnings per share of $1.10 beat the Zacks Consensus Estimate of 92 cents on higher trading volumes. Also, bottom line improved 13.6% from the year-ago quarter.

MarketAxess Holdings, Inc. Price, Consensus and EPS Surprise

Operational Update

MarketAxess posted total revenue of $97 million, meeting the Zacks Consensus Estimate. Revenues inched up 0.7% year over year.

The top-line improvement can be primarily attributed to 6.3% growth in investment income. Commission revenues increased 0.9% while information and post-trade services decreased 3.5% and other revenues declined 7.7% year over year.

Total trading volume increased 6.9% in the reported quarter to $361.5 billion year over year, driven by record trading volume in each of its four core products — U.S. high-grade, high-yield, Eurobonds and emerging market bonds, respectively.

Total expense of MarketAxess increased 3.6% year over year to $47.4 million. This rise was due to higher marketing and advertising costs, plus general and administrative expenses.

Financial Update

Total assets were $547 million as of Jun 30, 2017, up 3.4% from the year-end 2016.

Total cash and cash equivalents of $128.1 million, as of Jun 30, 2017, plunged 23.8% year over year. Total stockholder’s equity was $501 million, up 7.1% from the end of last year.

Free cash flow totaled $32.3 million, up 18.2% year over year.

Share Repurchase Update

MarketAxess repurchased 0.07 million shares for $12.4 million.

The board of directors of MarketAxess approved of a quarterly dividend of 33 cents payable on Aug 24, 2017 to stockholders of record on Aug 10, 2017.

Guidance for 2017

MarketAxess affirmed its guidance. It projects total expenses between $192.0 million and $208.0 million, capital spending between $25.0 million and $30.0 million and an overall effective tax rate between 26% and 28%.

Zacks Rank

MarketAxess currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Players

Among other securities exchanges, Nasdaq Inc (NDAQ - Free Report) beat estimates in the second quarter. While CME Group Inc. (CME - Free Report) will report results on Aug 1, Intercontinental Exchange Inc. (ICE - Free Report) will report on Aug 3.

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