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CME Group (CME) Q1 Earnings and Revenues Beat Estimates

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CME Group (CME - Free Report) reported first-quarter 2022 adjusted earnings per share of $2.11, which beat the Zacks Consensus Estimate of $2.00. The bottom line increased 17.9% year over year due to higher clearing and transaction fees and market data and information services.

Average daily volume increased in five out of the six products lines.

Shares gained 0.3% in the pre-market trading session to reflect the outperformance.

CME Group Inc. Price, Consensus and EPS Surprise

 

Performance in Detail

CME Group’s revenues of $1.3 billion increased 5% year over year. The year-over-year increase was primarily due to higher clearing and transaction fees (up 13% year over year) and market data and information services (up 5.2% year over year). The top line beat the Zacks Consensus Estimate by 5%.

Total expenses decreased 7.7% year over year to $487.5 million quarter, attributable to lower compensation and benefits, technology, professional fees and outside services, depreciation and amortization and amortization of purchased intangibles.

Operating income increased 18.5% from the prior-year quarter to $859.1 million.

ADV was 25.9 million contracts, including non-U.S. ADV of 7.3 million contracts, led by 28% growth in Latin America, 22% in Asia and 17% in EMEA.

Financial Update

As of Mar 31, 2022, CME Group had $2.9 billion of cash and marketable securities, down 26.9% from 2021 end. As of Mar 31, 2022, long-term debt of $3.4 billion increased 27.5% from 2021 end.

As of Mar 31, 2022, CME had total equity worth $27.7 billion, up 1.2% from 2021 end.

Capital Deployment

CME Group paid $1.5 billion in dividends, taking the tally to $18 billion returned to shareholders in the form of dividends since the implementation of the variable dividend policy in early 2012.

Zacks Rank

CME currently 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 Industry Players

Of the industry players that have reported first-quarter results so far, Nasdaq Inc. (NDAQ - Free Report) and MarketAxess Holdings (MKTX - Free Report) beat the respective Zacks Consensus Estimate for earnings

Nasdaq’s adjusted earnings per share of $1.97 beat the Zacks Consensus Estimate by 2.1% and improved 0.5% year over year. Revenues of $892 million increased 5% year over year and matched the consensus estimate. The operating margin of 51% contracted 200 basis points year over year.

Nasdaq expects 2022 non-GAAP operating expenses in the range of $1.70 billion to $1.76 billion, narrower than the prior expectation of $1.68 billion to $1.76 billion.

MarketAxess’ earnings per share of $1.73 beat the Zacks Consensus Estimate by 1.8%, driven by revenues and trading volumes but declined from $2.11 per share a year ago. Total revenues were $186 million, reflecting a decrease of 4.6% year over year but matching the consensus estimate. The operating margin of 47% expanded 340 basis points year over year.

MarketAxess’ emerging markets volume decreased 7% year over year while emerging markets ADV was up 5%. The total credit category’s trading volumes decreased 3% year over year to $12 billion.

Upcoming Release

Intercontinental Exchange Inc. (ICE - Free Report) is scheduled to release first-quarter 2022 earnings on May 5. The Zacks Consensus Estimate for Intercontinental Exchange’s first-quarter earnings is pegged at $1.42, indicating an increase of 6% from the year-ago reported figure.

Intercontinental Exchange beat estimates in all quarters of 2021.

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