Interactive Brokers reports strong Q4 results, FY 2014 revenues lag behind 2013 levels


Markets are now looking at Interactive Brokers (NASDAQ GS: IBKR), the Greenwich-based online trading group, which today released its financial and operating metrics for the final quarter and full year 2014.

After the US group reported a drop in revenues and profits in the third quarter of 2014, with market making weighing on the fortunes of the group, many were wondering whether Interactive Brokers would be able to produce more solid results in the fourth quarter of 2014.

If anyone had high expectations from Interactive Brokers for the final quarter of 2014, then it’s good to know that these expectations were met, with revenues and profits surging against levels recorded in the third quarter of 2014. Let’s get to the numbers:

Q4 2014:

Net revenues in the fourth quarter of 2014 amounted to $208.1 million, marking a rise of 21.7% against the result reported in the third quarter of 2014. Pre-tax profits added to the positive data, as income ahead of taxes reached $74.3 million, staging a jump of 86% against the $40 million in pre-tax profits seen in the third quarter of 2014.

Let’s not forget annual comparisons, which are often deemed as more accurate given the absence of season effects. Net revenues for the fourth quarter of last year were down by 17% from the result recorded in the final quarter of 2013. Pre-tax profits, however, rose by stunning 92% against the equivalent period a year earlier.

Shareholders would be happy to know that IB declared a quarterly cash dividend of $0.10 per share, to be payable on March 13, 2015.

FY 2014:

Net revenues amounted to $1,043 million, marking a decline against the $1,076 million result recorded in 2013.

Income before income taxes was $506 million for the entire 2014, compared to income before income taxes of $451 million for 2013.

Diluted earnings per share on a comprehensive basis fell to $0.51 in the year ended December 31, 2014 against diluted earnings per share on a comprehensive basis of $0.67 for 2013.

Stripping off effects of changes in the U.S. dollar value of IB’s non-U.S. subsidiaries, the company reported diluted earnings per share on net income of $0.77 for the year ended December 31, 2014, compared to diluted earnings per share of $0.73 for the same period in 2013.

Business Segments:

Electronic Brokerage business led the way, offering rises in terms of profit, customer accounts, customer equity, commission and execution fees income. Market Making weighed on the results, given the low volatility and high competition. The segment reported income before income taxes of $115 million for the entire 2014, down by 28% from levels recorded in 2013.

To conclude, let’s take a look at the Highlights chosen by the broker itself:

Business Highlights for 2014

  • 49% pretax profit margin for 2014.
  • 62% Electronic Brokerage pretax profit margin for 2014.
  • 40% Market Making pretax profit margin for 2014.
  • Customer equity grew 24% from 2013 to $56.7 billion.
  • Customer accounts increased 18% in 2014 to 281 thousand.
  • Total DARTs increased 16% from 2013 to 566 thousand.
  • Brokerage segment equity was $3.0 billion. Total equity was $5.2 billion.

In order to view the official announcement, click here.

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Interactive Brokers reports strong Q4 results, FY 2014 revenues lag behind 2013 levels

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