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CME (CME) Down 6.6% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for CME Group (CME - Free Report) . Shares have lost about 6.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is CME due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
CME Group Q4 Earnings Beat, Revenues Miss Estimates
CME Group reported fourth-quarter 2021 adjusted earnings per share of $1.66, which beat the Zacks Consensus Estimate of $1.64. The bottom line increased 19.4% year over year due to higher clearing and transaction fees and market data and information services.
Average daily volume increased in three out of the six products lines.
Performance in Detail
CME Group’s revenues of $1.1 billion increased 4.4% year over year. The year-over-year increase was primarily due to higher clearing and transaction fees (up 12.6% year over year) and market data and information services (up 1.6% year over year). The top line however missed the Zacks Consensus Estimate by a 2.3%.
Total expenses decreased 11.6% year over year to $515.6 million during the reported quarter, attributable to lower compensation and benefits, technology, professional fees and outside services, depreciation and amortization and amortization of purchased intangibles
Operating income increased 22.7% from the prior-year quarter to $631.7 million.
Average daily volume was 20.5 million contracts, up 26% year over year.
Full-Year Highlights
Adjusted earnings of $6.67 per share declined 0.7% year over year but were in line with the consensus estimate.
Operating revenues of $4.7 billion for 2021 decreased about 4% year over year but came in line with the consensus estimate.
CME achieved record trading volume in 2021, driven by client demand for tools to hedge against continued economic uncertainty across markets. CME Group delivered strong performance across core benchmarks, new products and international business in 2021.
Non-U.S. ADV reached a record 5.5 million contracts, up 4% year over year.
Financial Update
As of Dec 31, 2021, CME Group had $2.9 billion of cash and marketable securities, up 70.1% from 2020 end. As of Dec 31, 2021, long-term debt of $2.9 billion decreased 21.7% from 2019 end.
As of Dec 31, 2021, the company had total equity worth $27.4 billion, up 4.1% from 2020 end.
Capital Deployment
CME Group has returned about $17.5 billion to shareholders in the form of dividends since the implementation of the variable dividend policy in early 2012.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
Currently, CME has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, CME has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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CME (CME) Down 6.6% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for CME Group (CME - Free Report) . Shares have lost about 6.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is CME due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
CME Group Q4 Earnings Beat, Revenues Miss Estimates
CME Group reported fourth-quarter 2021 adjusted earnings per share of $1.66, which beat the Zacks Consensus Estimate of $1.64. The bottom line increased 19.4% year over year due to higher clearing and transaction fees and market data and information services.
Average daily volume increased in three out of the six products lines.
Performance in Detail
CME Group’s revenues of $1.1 billion increased 4.4% year over year. The year-over-year increase was primarily due to higher clearing and transaction fees (up 12.6% year over year) and market data and information services (up 1.6% year over year). The top line however missed the Zacks Consensus Estimate by a 2.3%.
Total expenses decreased 11.6% year over year to $515.6 million during the reported quarter, attributable to lower compensation and benefits, technology, professional fees and outside services, depreciation and amortization and amortization of purchased intangibles
Operating income increased 22.7% from the prior-year quarter to $631.7 million.
Average daily volume was 20.5 million contracts, up 26% year over year.
Full-Year Highlights
Adjusted earnings of $6.67 per share declined 0.7% year over year but were in line with the consensus estimate.
Operating revenues of $4.7 billion for 2021 decreased about 4% year over year but came in line with the consensus estimate.
CME achieved record trading volume in 2021, driven by client demand for tools to hedge against continued economic uncertainty across markets. CME Group delivered strong performance across core benchmarks, new products and international business in 2021.
Non-U.S. ADV reached a record 5.5 million contracts, up 4% year over year.
Financial Update
As of Dec 31, 2021, CME Group had $2.9 billion of cash and marketable securities, up 70.1% from 2020 end. As of Dec 31, 2021, long-term debt of $2.9 billion decreased 21.7% from 2019 end.
As of Dec 31, 2021, the company had total equity worth $27.4 billion, up 4.1% from 2020 end.
Capital Deployment
CME Group has returned about $17.5 billion to shareholders in the form of dividends since the implementation of the variable dividend policy in early 2012.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
Currently, CME has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, CME has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.