MarketAxess third-quarter EPS falls 17% to $1.53; block trading volume rises 21%

MarketAxess Holdings, the operator of an electronic trading platform for bonds, reported third-quarter diluted earnings per share of $1.53, against $1.84 a year earlier, in a results release dated October 23.

What happened

Total revenues were $210.4 million, up 1%. Commission revenue of $179.9 million was flat, and services revenue rose 6% to $30.5 million. Total trading average daily volume rose 13%, with market share gains in high yield and municipal bonds, the company said. Net income was $54.0 million, against $68.3 million a year earlier.

Block trading average daily volume rose 21% to $5.4 billion, with U.S. credit up 24%, Eurobonds up 16% and emerging markets up 15%. Portfolio trading average daily volume rose 37% to $1.9 billion. Dealer-initiated volume rose 2% to $1.5 billion.

Total expenses were $136.0 million, up 10%; excluding notable items they were $122.9 million, flat. Operating margin was 35.4%, down 560 basis points; excluding notable items it was 41.6%, up 60 basis points.

Notable items

Notable items before tax were $13.1 million in the quarter, which the company says consist of merger-related expenses "for the pending merger with Intercontinental Exchange, Inc." Excluding them, net income was $65.7 million and earnings per share were $1.86, up 1% from a year earlier.

Chief Executive Officer Chris Concannon said the company launched an enhanced X-Pro RFQ experience in U.S. credit and rolled out new tools for portfolio trading.