Securities Exchange Stock Q3 Earnings On Oct 26: NDAQ, MKTX
Zacks Investment Research | Oct 24, 2016 09:54PM ET
The Q3 earnings season is underway with 810 companies having reported their quarterly results so far. According to our latest Earnings Preview report, the performance of the 116 index members (accounting for 30% of the index’s total market capitalization) that have already reported their financial numbers this quarter indicate that total earnings have improved 3.3% on 1.8% higher revenues. The beat ratio seems strong with 80.2% companies beating the bottom line expectations and 62.9% outperforming on the top-line front.
The Finance sector (one of the 16 Zacks sectors) has started the Q3 earnings season on a strong note. In fact, the financial performance of 33.3% companies from this sector that have already reported their quarterly results indicates 7.9% earnings growth due to a 5.1% increase in revenues, on a year-over-year basis. Moreover, the beat ratios of 90% for the bottom line and 86.7% for the top line compare favorably with the S&P 500.
The Finance sector is highly diversified and includes several industries like insurance, banks and securities exchanges to name a few.
We believe that the securities exchanges have witnessed strong trading volume in Q3. Compelling product offering (including expansion of futures products into emerging markets and OTC offerings), prudent expense management, operating leverage, higher listing and strategic acquisitions should also have a favorable impact on the performance of these companies. Increase in electronic trading volume is another positive.
However, a soft derivative market and competition raise concerns. Soft interest rate environment and limited credit availability might offset the aforesaid positives to some extent.
Securities and Exchanges Industry Price Index
Will Nasdaq Pull a Surprise this Earnings Season? )
With respect to the surprise trend, Nasdaq surpassed expectations in three of the last four quarters, with an average beat of 2.00%.
NASDAQ INC Price and EPS Surprise
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With respect to the surprise trend, MarketAxess surpassed expectations in two of the last four quarters, but with an average miss of 0.45%.
Keep an eye on our full earnings articles to see how these companies finally fared.
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