With the incredible bull market in U.S. stock markets to record highs stockbrokers Interactive Brokers $IBKR and Charles Schwab $SCHW are set to report earnings with huge jumps in revenue expected.
With the incredible bull market in U.S. stock markets to record highs stockbrokers Interactive Brokers $IBKR and Charles Schwab $SCHW are set to report earnings with huge jumps in revenue expected. The increased volatilty and higher Fed Funds rate means higher commission and interest income.
High Frequency Trading in a Bull Market a Broker’s Dream
Interactive Brokers $IBKR Reports After The Market Tuesday
Forecast: EPS of $0.39 on a 100% rise in revenue of $399
- Electronic Brokerage: Net revenues rose 27% year over year to $367 million. Pre-tax income rose 13% to $142 million. Total DARTs for cleared and execution-only customers were 695,000, up 14% from the year-ago quarter. Pre-tax profit margin improved to 61% from 56% in the prior-year quarter.
- Market Making: Net revenues collapsed 30% year over year to $30 million. Pre-tax income was $11 million, up 57% from the year-ago quarter. The income improvement was driven by decline in operating costs after the winding down of its U.S. options market making business. The segment’s results included a $10 million net recovery of exit costs. Pre-tax profit margin improved to 37% from 16% in the prior-year quarter.
Charles Schwab $SCHW Reports Before The Market Wednesday
Forecast: EPS of 41 cents with an increase of 13% in revenue to $1.23 billion
- Client Assets: $3.18 trillion as of Sep 30, 2017
- Core net new assets: $51.6 billion as of Sep 30, 2017, up 72% year over year
- Average interest-earning assets : Rose 10% to $214.3 billion at quarter end
- Fee waivers: Fell to $1 million from $41 million in prior year quarter.
The brokers follow the earnings from the money center banks JPMorgan $JPM, Wells Fargo $WFC and PNC Financial $PNC which all announced big jumps in revenue.
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