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Cboe Global's (CBOE) Q1 Earnings Beat Estimates, Down Y/Y

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Cboe Global Markets, Inc.’s (CBOE - Free Report) first-quarter 2019 adjusted earnings of $1.11 per share beat the Zacks Consensus Estimate of 99 cents by 12.1%, mainly on the back of lower expenses. However, the bottom line declined 24.3% year over year. The performance was partially offset by weaker revenues.

Operational Details

Total revenues came in at $281 million, surpassing the Zacks Consensus Estimate by 0.7%. However, the top line was down nearly 14.6% year over year due to soft segmental trading volumes.

Average daily volume for Options fell 22% year over year while the revenue per contract or RPC contracted 7% in the first quarter.

Although total RPC for U.S. Futures inched up 0.7% year over year, the company’s ADV dropped 37.2% year over year.

Total operating expenses decreased 16.7% year over year to $134 million on the back of lower compensation and benefits owing to reduced incentive compensation.

Adjusted operating margin for the quarter under review was flat at 66.5%, reflecting improved costs.

Financial Update

As of Mar 31, 2019, CBOE Global had cash and cash equivalents of $346.2 million, up 25.8% from the figure at 2018 end. Total assets were $5.3 billion in the first quarter, rising 0.2% from the level at 2018 end.

At the end of the first quarter, long-term debt of the company stands at $916 million, up 0.1% year over year.

Total shareholders’ equity was $3.2 billion at the end of the reported quarter, up 1.4% compared with Dec 31, 2018’s value.

Share Repurchase and Dividend Update

The company paid cash dividends worth $34.8 million or 31 cents per share in the first quarter.

For the first three months of 2019, the company bought back shares worth $35 million. As of Mar 31, 2019, the company has around $171.1 million left under its current share repurchase authorization.

Fiscal 2019 Outlook

Adjusted operating expenses are now expected between $415 million and $423 million, down from the earlier guidance of $420-$428 million.

Depreciation and amortization expenses are still anticipated between $35 million and $40 million excluding the amortization of acquired intangible assets of $138 million.

Capital expenditures are now projected in the $50-$55 million band.

The effective tax rate on adjusted earnings for 2019 is likely to be within 27-29%.

Zacks Rank and Performance of Other Players

Cboe Global has 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 same space, which already reported first-quarter earnings so far, the bottom-line figures of CME Group Inc. (CME - Free Report) , Nasdaq, Inc. (NDAQ - Free Report) and Intercontinental Exchange, Inc. (ICE - Free Report) beat the respective Zacks Consensus Estimate.

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