August 3, 2018 / 11:42 AM / 2 months ago

Cboe beats profit estimates on higher transaction fees

(Reuters) - Cboe Global Markets Inc CBOE.O topped analysts’ estimates for second-quarter profit on Friday, as its options business benefited from an increase in transaction fees.

The exchange operator also showed strong growth in its European equities and foreign exchange businesses, but its VIX options and futures business was hit by weak trading.

VIX futures daily trading volume fell 16 percent. The index, Wall Street’s so-called “fear gauge”, is linked to billions of dollars in derivatives products.

The company had said in May that it was tweaking the auction process for the VIX following allegations of possible manipulation of the index.

Transaction fees rose 2.4 percent to $464.8 million in the quarter ended June 30, in part due to an increase in index options revenue per contract.

Net revenue from European equities business jumped 26 percent, while that from global foreign exchange unit surged 33 percent.

Net income allocated to common stockholders rose to $82.4 million, or 73 cents per share, in the second quarter ended June 30 from $67.3 million, or 60 cents per share, a year earlier.

Excluding one-time items, Cboe earned $1.05 per share, beating analysts’ average estimate of $1.03, according to Thomson Reuters I/B/E/S.

The Chicago-based trading firm’s net revenue rose 6.2 percent to $283.5 million, compared with estimates of $278.2 million.

Reporting by Nikhil Subba in Bengaluru; Editing by Anil D'Silva

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