October 28, 2016 / 12:17 PM / 2 years ago

UPDATE 1-CBOE profit plunges 40 pct as transaction-fee revenue drops

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Oct 28 (Reuters) - CBOE Holdings Inc, the operator of the largest U.S. options exchange, reported a 40 percent fall in quarterly profit, hurt by lower revenue from transaction fees and acquisition-related costs.

CBOE said its profit took an $8.6 million hit from acquisition-related costs in the quarter. The company had agreed to buy Bats Global Markets Inc for $3.2 billion last month.

The company, which owns the Chicago Board Options Exchange, said operating revenue fell 16.5 percent to $156.21 million.

Transaction fees slumped 22.7 percent in the quarter as markets were less volatile compared with last year, which saw higher activity due to worries over China’s economy and a rout in the energy market.

The average rate paid per contract fell 12.3 percent to 37 cents from a year earlier, the company said.

CBOE said net income allocated to common shareholders fell to $40.28 million, or 50 cents per share, in the quarter ended Sept. 30 from $67.22 million, or 81 cents per share, a year earlier.

Excluding items, the company earned 58 cents per share, beating the average analyst estimate of 56 cents, according to Thomson Reuters I/B/E/S.

Operating expenses rose 5.4 percent to $90.56 million.

Up to Thursday’s close, CBOE’s stock had fallen 4.22 percent this year. (Reporting by Sruthi Shankar in Bengaluru; Editing by Anil D’Silva)

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