Interactive Brokers Raises Dividend About 71% as Third-Quarter Profit Climbs

Interactive Brokers Group (NASDAQ: IBKR) reported third-quarter adjusted earnings of $0.67 a share, up from $0.57 a year earlier after the close on Thursday. The shares were down about 1.3% in after-hours trading following the release.

The stock had already closed the regular session today up 2.25% at $86.03.

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On a GAAP basis, the standard US accounting measure, net revenues rose 16% to $1.91bn from $1.66bn, and diluted earnings per share were $0.69 against $0.59. Pretax margin was 78%, compared with 79% a year ago.

Net interest income, what the broker earns on customer margin loans and cash balances, rose 19% to $1.15bn as margin loans grew 36% to $105.2bn. Commission revenue rose 12% to $602m, helped by 18% higher daily average revenue trades, or DARTs, and higher regulatory fees passed on to customers.

Customer accounts rose 35% to 5.58m, up 8% on the previous quarter, and customer equity rose 27% to $964.7bn.

The caveats sit in activity and margins. Total DARTs of 4.27m were 11% below the second quarter, and customer stock volume fell 24% from a year earlier. Net interest margin slipped to 1.99% from 2.16%, and the yield on margin loans to 4.25% from 4.60%, even as lending grew.

The board also raised the quarterly dividend to $0.15 a share from $0.0875, payable on the 14th of December to holders of record on the 1st of December.

The company holds its results conference call at 4.30pm Eastern, which is 9.30pm in the UK.