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It has been about a month since the last earnings report for CBOE Holdings (CBOE). Shares have added about 3.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is CBOE due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Cboe Global's Q2 Earnings Beat Estimates, Rise Y/Y
Cboe Global Markets second-quarter 2019 adjusted earnings of $1.13 per share beat the Zacks Consensus Estimate by 5.6% on the back of its Options segment. Moreover, the bottom line increased 7.6% year over year.
Operational Details
Total revenues came in at $283.2 million, missing the Zacks Consensus Estimate by 0.3%. Moreover, the top line dipped nearly 0.1% due to lower trading volume across all business segments apart from the Options segment.
Average daily volume for Options inched up 2% year over year while the revenue per contract or RPC slipped 1% in the second quarter.
Total RPC for U.S. Futures was up 7% year over year.
Total operating expenses increased 2.3% year over year to $158 million.
Adjusted operating margin for the quarter under review was 63.6%, reflecting lower costs.
Financial Update
As of Jun 30, 2019, CBOE Global had cash and cash equivalents of $161.3 million, down 41.3% from the figure at 2018 end. Total assets were $5.2 billion in the second quarter, down 3% from the level at 2018 end.
At the end of the second quarter, long-term debt of the company stands at $916.6 million, up 0.1% year over year.
Total shareholders’ equity was $3.3 billion at the end of the reported quarter, up 2.7% from the value on Dec 31, 2018.
Share Repurchase and Dividend Update
The company paid out cash dividends worth $34.8 million or 31 cents per share in the second quarter.
As of Jun 30, 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 $405 and $413 million, down from the previous estimate of $415-$423 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 in the lower end of the 27-29% range.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
At this time, CBOE has a great Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.