Adds CEO comments in paragraph 2, CFO comments in paragraph 8, and analyst comments in paragraphs 4 and 5
By Prakhar Srivastava
Oct 31 (Reuters) - Cboe Global Markets CBOE.Z beat Wall Street estimates for the third quarter on Friday, lifted by strong options trading, and said it will sell its equities businesses in Australia and Canada to focus on core operations.
CEO Craig Donohue said the derivative exchange will concentrate on event and prediction, digital, and crypto markets, adding that there is strong growth in these areas.
Cboe will also stop its U.S. and European corporate listings operations and cut costs tied to its U.S. and European exchange-traded product listings, Europe derivatives and several smaller risk and analytics units.
Citi analyst Christopher Allen said the moves were "margin accretive and make sense," provided they do not hurt growth in other areas, particularly in data.
"We expect investor reaction to be positive but with questions on top-line growth trajectory."
Shares of Cboe were up 3.4% in trading.
Friday's announcement follows Cboe's decision in July to wind down its Japanese equities business, citing financial sustainability.
Chief Financial Officer Jill Griebenow said the combined impact of the restructuring plans will be accretive to earnings.
RECORD OPTIONS VOLUMES
The Chicago, Illinois-based company's results wrapped up third-quarter earnings for exchanges across the country, including CME Group CME.O, Nasdaq NDAQ.O and Intercontinental Exchange ICE.N.
Market volatility, fueled by geopolitical tensions and shifting trade policies under U.S. President Donald Trump, has spurred investors to hedge positions, boosting trading activity.
Cboe's total average daily volumes $(ADV)$ in options increased to a record 18.8 million contracts in the quarter, while S&P 500 index options ADV rose to a record 3.9 million contracts.
Its options business revenue jumped 19% from a year earlier to a record $380.8 million.
Cboe's consolidated net transaction and clearing fees were up 14.2% to $446.6 million.
Its adjusted net income rose to $279.8 million, or $2.67 per share, beating analyst expectations of $2.53 per share, according to data compiled by LSEG.
(Reporting by Prakhar Srivastava in Bengaluru; Editing by Shreya Biswas, Krishna Chandra Eluri and Sahal Muhammed)
((Prakhar.srivastava2@thomsonreuters.com;))