Cboe Global Markets reported a 90% increase in fourth-quarter earnings, above Wall Street projections thanks to increasing transaction volumes, particularly in options, and lower-than-expected expenses.
Cboe said its net income applicable to common shareholders increased to $165.3 million, or $1.54 per diluted share, in the quarter ended Dec. 31. Cboe provides trading platforms and products in equities, derivatives, and foreign exchange across North America, Europe, and the Asia Pacific. In comparison, a year ago, the company earned $87.1 million, or 81 cents per diluted share.
Cboe Chief Executive Officer Ed Tilly said on a conference call after the earnings were revealed, "Our results were driven by stronger volumes across our businesses, coupled with growing demand from our array of data and access offerings."
Higher trading volumes in the Chicago-based company's own products, which include options tied to the VIX volatility index and the S&P 500, boosted options revenues by 25%. The average daily volumes of VIX futures increased by 50%, according to the report.
Cboe's VIX futures volumes increased 31% year over year in January, VIX options surged 24%, and SPX options rose 17%, the company said, as market volatility increased and expectations for Federal Reserve interest rate hikes grew.
The company's net revenue increased by 27% to 390.5 million dollars.
According to IBES statistics from Refinitiv, Cboe earned $1.70 per diluted share after one-time factors including M&A costs, outperforming the mean analyst forecast by 17 cents.
According to Jefferies analyst Daniel Fannon, the beat was driven by higher-than-expected transaction fees and lower-than-expected expenditures.
In a client note, Fannon noted that Cboe's 2022 expense forecast of $617 million to $625 million was above consensus estimates.
Late Friday morning, Cboe's stock was down 0.2% at $116.45.