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CME Group (CME) Q3 Earnings Beat on Higher Trading Volumes
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CME Group Inc. (CME - Free Report) reported third-quarter 2017 adjusted earnings per share of $1.19, beating the Zacks Consensus Estimate of $1.16. The bottom line also improved 13.3% year over year.
Results were primarily driven by higher trading volumes. Options business remained sturdy in the quarter.
Including one-time items, the net income was 91 cents per share, down 34.5% year over year.
Performance in Detail
CME Group’s revenues of $891 million increased 5.8% year over year. This reported figure marginally beat the Zacks Consensus Estimate of $890 million. Improvement in revenues may be attributable to higher clearing and transaction fees (up 7% year over year), plus access and communication fees (up nearly 8%).
Total expenses increased 2.1% year over year to $322.9 million during the reported quarter, attributable to a rise in compensation and benefits, technology support services as well as licensing and other fee agreements.
Operating income improved about 8.1% to $567.9 million from the prior-year quarter.
Average daily volume (ADV) rose 10% year over year to a record 15.7 million contracts with growth across five of the six product lines. Average rate per contract increased in only one of the six product lines.
Financial Update
As of Sep 30, 2017, CME Group had $1.7 billion of cash and marketable securities, down 10% from the year-end 2016. As of Sep 30, 2017, long-term debt of $2.2 billion inched up 0.1% from year-end 2016 figure.
As of Sep 30, 2017, the company had total assets worth $78.3 billion, up from $69.4 billion at year-end 2016.
The company paid dividends worth $224 million in the reported quarter.
Our Take
CME Group’s results reflect a solid performance. The company remains well-positioned for growth, given its strong market position with diverse derivative product lines. Efforts to expand and cross-sell core exchange-traded business through strategic alliances and acquisitions, new product initiatives and global reach, boost growth. However, escalating costs and stiff competition remain key challenges.
Performance of Other Companies in Securities Exchange Industry
While the bottom line at Nasdaq, Inc. (NDAQ - Free Report) beat the Zacks Consensus Estimate, the same at MarketAxess Holdings Inc. (MKTX - Free Report) missed the estimates in the third quarter of 2017.
Intercontinental Exchange Inc. (ICE - Free Report) will report third-quarter results on Nov 2 before the market opens. The Zacks Consensus Estimate is pegged at 71 cents, up 10.4% year over year.
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CME Group (CME) Q3 Earnings Beat on Higher Trading Volumes
CME Group Inc. (CME - Free Report) reported third-quarter 2017 adjusted earnings per share of $1.19, beating the Zacks Consensus Estimate of $1.16. The bottom line also improved 13.3% year over year.
Results were primarily driven by higher trading volumes. Options business remained sturdy in the quarter.
CME Group Inc. Price, Consensus and EPS Surprise
CME Group Inc. Price, Consensus and EPS Surprise | CME Group Inc. Quote
Including one-time items, the net income was 91 cents per share, down 34.5% year over year.
Performance in Detail
CME Group’s revenues of $891 million increased 5.8% year over year. This reported figure marginally beat the Zacks Consensus Estimate of $890 million. Improvement in revenues may be attributable to higher clearing and transaction fees (up 7% year over year), plus access and communication fees (up nearly 8%).
Total expenses increased 2.1% year over year to $322.9 million during the reported quarter, attributable to a rise in compensation and benefits, technology support services as well as licensing and other fee agreements.
Operating income improved about 8.1% to $567.9 million from the prior-year quarter.
Average daily volume (ADV) rose 10% year over year to a record 15.7 million contracts with growth across five of the six product lines. Average rate per contract increased in only one of the six product lines.
Financial Update
As of Sep 30, 2017, CME Group had $1.7 billion of cash and marketable securities, down 10% from the year-end 2016. As of Sep 30, 2017, long-term debt of $2.2 billion inched up 0.1% from year-end 2016 figure.
As of Sep 30, 2017, the company had total assets worth $78.3 billion, up from $69.4 billion at year-end 2016.
The company paid dividends worth $224 million in the reported quarter.
Our Take
CME Group’s results reflect a solid performance. The company remains well-positioned for growth, given its strong market position with diverse derivative product lines. Efforts to expand and cross-sell core exchange-traded business through strategic alliances and acquisitions, new product initiatives and global reach, boost growth. However, escalating costs and stiff competition remain key challenges.
Currently, CME Group carries a Zacks Rank # 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Companies in Securities Exchange Industry
While the bottom line at Nasdaq, Inc. (NDAQ - Free Report) beat the Zacks Consensus Estimate, the same at MarketAxess Holdings Inc. (MKTX - Free Report) missed the estimates in the third quarter of 2017.
Intercontinental Exchange Inc. (ICE - Free Report) will report third-quarter results on Nov 2 before the market opens. The Zacks Consensus Estimate is pegged at 71 cents, up 10.4% year over year.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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