UPDATE 1-CBOE Q2 profit rises as volatility pumps up trading
(Adds details, background)
Aug 2 (Reuters) - CBOE Holdings Inc reported a rise in second-quarter profit on Friday, beating analysts' expectations as stock market volatility climbed and trading in CBOE's lucrative exclusive contracts surged.
Adjusted net income rose to $47.0 million, or 54 cents a share, from $37.9 million, or 44 cents a share, the operator of the Chicago Board Options Exchange said in a statement. Analysts expected 51 cents, on average, according to Thomson Reuters I/B/E/S.
The quarterly results underscored the importance of CBOE's exclusively listed contracts, including options on the Standard & Poor's 500 Index and futures and options on its CBOE VIX volatility index, known as Wall Street's fear gauge.
Revenue rose 14 percent in the quarter to $150.8 million. CBOE's highest-fee products, its proprietary index options and futures, accounted for 34.7 percent of all trading, up from 28 percent a year earlier.
Late last month CBOE's new chief executive, Edward Tilly, said the exchange was back on track to expand trading hours in some of those products later this year. Analysts say the plan will help boost trading further by capturing demand from overseas investors.
Nearly 5 million contracts changed hands on an average day in the second quarter, CBOE said.
Trading in July has been less robust, with 4.46 million contracts changing hands on an average day, CBOE reported Thursday.
Adjustments to 2013 second-quarter expenses included $1 million for a settlement with the U.S. Securities and Exchange Commission over a regulatory probe. Without the adjustment, net income was $45.4 million, or 52 cents a share.
CBOE settled with the SEC in June, paying a $6 million fine and agreeing to make major changes to its regulatory structure after the SEC found its self-regulatory compliance lacking. CBOE had earlier reserved $5 million for the fine.
(Reporting by Ann Saphir; Editing by Gerald E. McCormick and Jeffrey Benkoe)