Interactive Brokers Group
(NYSE:IBKR) shares plummeted $1.98, or 7.19%, to $25.57 in early
trading today after the company released lower first quarter earnings
on higher revenues. The newly IPO'd options firm posted net income of
31 cents per share compared to 34 cents per share one year ago.
Why
is this so troubling for investors? Well, the brokerage market appears
to be extremely hot right now with almost all competitors posting
record gains while IBKR was the first to be stalling. The brokerage
clearly experienced some of this upside in the market by increasing
their trading volume by 40% quarter over quarter but somehow managed to
report declining earnings.
Interactive Brokers reported
declining revenues from trading gains and other income while interest
income and revenues from commissions and fees rose. These numbers
suggest that the brokerage raised its fees in order to compensate for
lack of bottom-line net income growth - a negative sign to many
investors. Whether this is a one-time occurrence or a larger slowdown
in the brokerage industry remains to be seen; however, this stock is
definitely
one to watch.
Related CompaniesIntercontinentalExchange (ICE)Nasdaq Stock Market (NDAQ)New York Stock Exchange (NYX)