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Can Higher Revenues Drive CME Group's (CME) Q3 Earnings?
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CME Group Inc. (CME - Free Report) is set to report third-quarter earnings on Oct 26 before the market opens. The company delivered a positive earnings surprise in the last two quarters. Let’s see what it has in store for this yet-to-be reported quarter.
CME Group’s top line has likely improved owing to higher clearing and transaction fees. The company’s efforts to ramp up organic market data growth will add to the top line. The Zacks Consensus estimate for market data and information services are pegged at $96 million.
CME Group’s average daily volume (ADV) for the third quarter stood at 15.7 million contracts, up 10% year over year. Five of its six product lines delivered growth in ADV in the third quarter.
About 74% of CME Group’s metal options currently trade electronically. Metals’ ADV in the third quarter increased 42%, the highest across its six product lines.
However, license fees likely have increased on the back of transfer of the Russell products in July and aggregate changes in licenses.
The tax rate likely has increased in the third quarter, given an increase in the Illinois state income tax.
The Zacks Consensus Estimate for the third quarter is pegged at $1.16 per share on $889.9 million revenues. The bottom line reflects a 10.6% rise, while the top line translates to an increase of 5.7%, both on a year-over-year basis.
What our Quantitative Model Predicts
Our proven model does not conclusively show that CME Group is likely to beat estimates this quarter. This is because a stock needs to have the right combination of two main ingredients — a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for an earnings beat. But that is not the case here as elaborated below.
Zacks ESP: CME Group has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: CME Group carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against all Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Some stocks worth considering from the finance sector with the right combination of elements to come up with an earnings beat this quarter are as follows:
Lincoln National Corporation (LNC - Free Report) has an Earnings ESP of +0.05% and also holds a Zacks Rank of 2. The company is slated to report third-quarter earnings on Nov 1.
American Equity Investment Life Holding Company (AEL - Free Report) has an Earnings ESP of +0.40%. This #2 Ranked company is set to report third-quarter earnings on Nov 6.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Can Higher Revenues Drive CME Group's (CME) Q3 Earnings?
CME Group Inc. (CME - Free Report) is set to report third-quarter earnings on Oct 26 before the market opens. The company delivered a positive earnings surprise in the last two quarters. Let’s see what it has in store for this yet-to-be reported quarter.
CME Group’s top line has likely improved owing to higher clearing and transaction fees. The company’s efforts to ramp up organic market data growth will add to the top line. The Zacks Consensus estimate for market data and information services are pegged at $96 million.
CME Group’s average daily volume (ADV) for the third quarter stood at 15.7 million contracts, up 10% year over year. Five of its six product lines delivered growth in ADV in the third quarter.
About 74% of CME Group’s metal options currently trade electronically. Metals’ ADV in the third quarter increased 42%, the highest across its six product lines.
However, license fees likely have increased on the back of transfer of the Russell products in July and aggregate changes in licenses.
The tax rate likely has increased in the third quarter, given an increase in the Illinois state income tax.
The Zacks Consensus Estimate for the third quarter is pegged at $1.16 per share on $889.9 million revenues. The bottom line reflects a 10.6% rise, while the top line translates to an increase of 5.7%, both on a year-over-year basis.
What our Quantitative Model Predicts
Our proven model does not conclusively show that CME Group is likely to beat estimates this quarter. This is because a stock needs to have the right combination of two main ingredients — a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for an earnings beat. But that is not the case here as elaborated below.
Zacks ESP: CME Group has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
CME Group Inc. Price and EPS Surprise
CME Group Inc. Price and EPS Surprise | CME Group Inc. Quote
Zacks Rank: CME Group carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against all Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Some stocks worth considering from the finance sector with the right combination of elements to come up with an earnings beat this quarter are as follows:
Prudential Financial (PRU - Free Report) is set to report third-quarter earnings on Nov 1 with an Earnings ESP of +0.07% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Lincoln National Corporation (LNC - Free Report) has an Earnings ESP of +0.05% and also holds a Zacks Rank of 2. The company is slated to report third-quarter earnings on Nov 1.
American Equity Investment Life Holding Company (AEL - Free Report) has an Earnings ESP of +0.40%. This #2 Ranked company is set to report third-quarter earnings on Nov 6.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>