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CME Group (CME) Q3 Earnings: What Lies Ahead for the Stock?
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CME Group Inc. (CME - Free Report) is set to report third-quarter 2018 earnings on Oct 25, before the market opens. Notably, the company delivered a positive surprise in all the last four quarters.
Let’s see, what is in store for the company this yet-to-be reported quarter.
The company has likely witnessed an increase in clearing and transaction fees as well as improved access and communication fees. This in turn, has possibly led to growth in the top line. The Zacks Consensus Estimate for clearing and transaction fees is pegged at $775 million, up 2.5% year over year.
Leading market share of the global futures trading and clearing services, prudent investment and focused activities from sales and marketing, expansion of futures products in the emerging markets, non-transaction related opportunities and OTC offerings might have aided the top-line increase for CME in the third quarter. The Zacks Consensus Estimate for revenues stands at $910.5 million, up 2.2% year over year.
For the third quarter, average daily volume was 15.6 million contracts, slipping 1% year over year as three product lines witnessed lower volume. Energy volumes contracted 18%, Foreign exchange declined 3% and Agricultural Commodities volume decreased by 2%. However, a 2% rise, each in Metals and Equity Indexes volume plus a 5% improvement in Interest Rates volume limited this downside.
CME Group has announced to shut down the London-based derivatives exchange and clearing house, CME Europe and CME Clearing Europe, by 2018-end. Closure of operations will result in annual savings between $10 million and $12 million.
Lower tax incidence should have supported the bottom line in the third quarter.
The Zacks Consensus Estimate for earnings is pegged at $1.42 per share, reflecting a rise of 19.3%.
However, the company is likely to witness higher expenses in the yet-to-be-reported quarter, mainly due to investments in several strategic initiatives.
What Our Quantitative Model Predicts
Our proven model does not conclusively show that CME Group is likely to beat on earnings this reporting season. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.
Earnings ESP: CME Group has an Earnings ESP of 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate stand at $1.42. 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 the 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 surpass estimates this time around are as follows:
American Financial Group, Inc. (AFG - Free Report) has an Earnings ESP of +2.46% and is a Zacks #3 Ranked player. The company is slated to release third-quarter earnings on Oct 30.
Ameriprise Financial, Inc. (AMP - Free Report) has an Earnings ESP of +4.30% and a Zacks Rank #2. The company will announce third-quarter earnings on Oct 23.
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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CME Group (CME) Q3 Earnings: What Lies Ahead for the Stock?
CME Group Inc. (CME - Free Report) is set to report third-quarter 2018 earnings on Oct 25, before the market opens. Notably, the company delivered a positive surprise in all the last four quarters.
Let’s see, what is in store for the company this yet-to-be reported quarter.
The company has likely witnessed an increase in clearing and transaction fees as well as improved access and communication fees. This in turn, has possibly led to growth in the top line. The Zacks Consensus Estimate for clearing and transaction fees is pegged at $775 million, up 2.5% year over year.
Leading market share of the global futures trading and clearing services, prudent investment and focused activities from sales and marketing, expansion of futures products in the emerging markets, non-transaction related opportunities and OTC offerings might have aided the top-line increase for CME in the third quarter. The Zacks Consensus Estimate for revenues stands at $910.5 million, up 2.2% year over year.
For the third quarter, average daily volume was 15.6 million contracts, slipping 1% year over year as three product lines witnessed lower volume. Energy volumes contracted 18%, Foreign exchange declined 3% and Agricultural Commodities volume decreased by 2%. However, a 2% rise, each in Metals and Equity Indexes volume plus a 5% improvement in Interest Rates volume limited this downside.
CME Group has announced to shut down the London-based derivatives exchange and clearing house, CME Europe and CME Clearing Europe, by 2018-end. Closure of operations will result in annual savings between $10 million and $12 million.
Lower tax incidence should have supported the bottom line in the third quarter.
The Zacks Consensus Estimate for earnings is pegged at $1.42 per share, reflecting a rise of 19.3%.
However, the company is likely to witness higher expenses in the yet-to-be-reported quarter, mainly due to investments in several strategic initiatives.
What Our Quantitative Model Predicts
Our proven model does not conclusively show that CME Group is likely to beat on earnings this reporting season. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.
Earnings ESP: CME Group has an Earnings ESP of 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate stand at $1.42. 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 the 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 surpass estimates this time around are as follows:
Cboe Global Markets, Inc. (CBOE - Free Report) is set to report third-quarter earnings on Nov 2. The stock has an Earnings ESP of +0.91% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
American Financial Group, Inc. (AFG - Free Report) has an Earnings ESP of +2.46% and is a Zacks #3 Ranked player. The company is slated to release third-quarter earnings on Oct 30.
Ameriprise Financial, Inc. (AMP - Free Report) has an Earnings ESP of +4.30% and a Zacks Rank #2. The company will announce third-quarter earnings on Oct 23.
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.
See the pot trades we're targeting>>