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MarketAxess Holdings Inc.’s (MKTX - Free Report) third-quarter 2018 earnings per share of $1.02 beat the Zacks Consensus Estimate by 9.7% and improved 13.3% year over year.
Better-than-expected results were driven by gains across core products, higher market trading volume and better Eurobond volumes.
Operational Update
Third-quarter revenues totaled $101.4 million, up 6.1% year over year and in line with the Zacks Consensus Estimate.
Commission revenues increased 4.9% year over year to $90.5 million. All other revenues rose 17.4% year over year to $10.9 million, majorly owing to higher information services revenues as well as post-trade services revenues.
Total trading volume expanded 11.2% year over year to $385.5 billion.
Total expenses at MarketAxess increased 12.4% from the prior-year quarter to $55 million. This downside was due to higher costs incurred for depreciation and amortization, marketing and advertising, technology and communication, employee compensation and benefit.
The effective tax rate was 19.3% in the third quarter compared with 27.7% in the year-ago period. The income tax provision for the third quarter reflected excess tax benefits related to share-base compensation awards and decrease in provisional tax charges recorded in 2017 in connection with the Tax Cuts and Jobs Act. The prior-year quarter’s income tax provision included $3.8 million of excess tax benefits regarding share-based compensation awards.
Financial Update
Total assets were $646.1 million as of Sep 30, 2018, up 11.2% from year-end 2017.
Total cash, cash equivalents and investments were $446.2 million, up 9.8% from 2017 end.
As of Sep 30, 2018, total stockholders’ equity was $578.6 million.
Free cash flow summed $47 million, up 21.7% year over year.
Guidance for 2018
MarketAxess has updated its full-year overall effective tax rate outlook to 21-22%, down from the previous projection of 23-25%. This is primarily because of the excess tax benefits related to share-based compensation awards exercised during 2018.
Moreover, it also expects its full-year expenses to be around the low-end of $220-$232 million range. This includes duplicate occupancy costs of nearly $7 million for its new offices in New York. MarketAxess predicts capital expenditures for the year to be around the high-end of the $43-$50 million band including around $26 million of buildout expenses for the new corporate offices.
Share Repurchase and Dividend Update
MarketAxess bought back shares worth $6.1 million in the third quarter.
The company's board of directors announced a cash dividend of 42 cents per share of outstanding common stock. The same will be paid out on Nov 21, 2018 to stockholders of record at the close of business on Nov 7, 2018.
Among other players from the finance sector, Nasdaq, Inc. (NDAQ - Free Report) reported third-quarter earnings beating estimates while Banc of California, Inc. (BANC - Free Report) and Discover Financial Services (DFS - Free Report) , both holding a Zacks Rank #2 (Buy), are set to release third-quarter financial numbers on Oct 25.
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MarketAxess' (MKTX) Q3 Earnings Beat Estimates, Rise Y/Y
MarketAxess Holdings Inc.’s (MKTX - Free Report) third-quarter 2018 earnings per share of $1.02 beat the Zacks Consensus Estimate by 9.7% and improved 13.3% year over year.
AMERISAFE, Inc. Price, Consensus and EPS Surprise
AMERISAFE, Inc. Price, Consensus and EPS Surprise | AMERISAFE, Inc. Quote
Better-than-expected results were driven by gains across core products, higher market trading volume and better Eurobond volumes.
Operational Update
Third-quarter revenues totaled $101.4 million, up 6.1% year over year and in line with the Zacks Consensus Estimate.
Commission revenues increased 4.9% year over year to $90.5 million. All other revenues rose 17.4% year over year to $10.9 million, majorly owing to higher information services revenues as well as post-trade services revenues.
Total trading volume expanded 11.2% year over year to $385.5 billion.
Total expenses at MarketAxess increased 12.4% from the prior-year quarter to $55 million. This downside was due to higher costs incurred for depreciation and amortization, marketing and advertising, technology and communication, employee compensation and benefit.
The effective tax rate was 19.3% in the third quarter compared with 27.7% in the year-ago period. The income tax provision for the third quarter reflected excess tax benefits related to share-base compensation awards and decrease in provisional tax charges recorded in 2017 in connection with the Tax Cuts and Jobs Act. The prior-year quarter’s income tax provision included $3.8 million of excess tax benefits regarding share-based compensation awards.
Financial Update
Total assets were $646.1 million as of Sep 30, 2018, up 11.2% from year-end 2017.
Total cash, cash equivalents and investments were $446.2 million, up 9.8% from 2017 end.
As of Sep 30, 2018, total stockholders’ equity was $578.6 million.
Free cash flow summed $47 million, up 21.7% year over year.
Guidance for 2018
MarketAxess has updated its full-year overall effective tax rate outlook to 21-22%, down from the previous projection of 23-25%. This is primarily because of the excess tax benefits related to share-based compensation awards exercised during 2018.
Moreover, it also expects its full-year expenses to be around the low-end of $220-$232 million range. This includes duplicate occupancy costs of nearly $7 million for its new offices in New York. MarketAxess predicts capital expenditures for the year to be around the high-end of the $43-$50 million band including around $26 million of buildout expenses for the new corporate offices.
Share Repurchase and Dividend Update
MarketAxess bought back shares worth $6.1 million in the third quarter.
The company's board of directors announced a cash dividend of 42 cents per share of outstanding common stock. The same will be paid out on Nov 21, 2018 to stockholders of record at the close of business on Nov 7, 2018.
Zacks Rank & Other Releases
MarketAxesscarries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Among other players from the finance sector, Nasdaq, Inc. (NDAQ - Free Report) reported third-quarter earnings beating estimates while Banc of California, Inc. (BANC - Free Report) and Discover Financial Services (DFS - Free Report) , both holding a Zacks Rank #2 (Buy), are set to release third-quarter financial numbers on Oct 25.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>