It has been about a month since the last earnings report for CME Group (
CME Quick Quote CME - Free Report) . Shares have lost about 3% in that time frame, outperforming 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 drivers.
CME Group Q4 Earnings Top on Higher Trading Volume CME Group reported fourth-quarter 2022 adjusted earnings per share of $1.92, which beat the Zacks Consensus Estimate of $1.90. The bottom line increased 15.7% year over year. Quarterly results benefited from an increase in trading volumes. Average daily volume increased in four of its six asset classes. Performance in Detail
CME Group’s revenues of $1.2 billion increased 5.3% year over year. The year-over-year increase was primarily due to higher clearing and transaction fees (up 3.4% year over year) and market data and information services (up 7.8% year over year). The top line missed the Zacks Consensus Estimate by 0.2%.
Total expenses increased 4.6% year over year to $539.5 million quarter, attributable to higher technology, professional fees and outside services, licensing and other fee agreements and other expenses. Operating income increased 5.8% from the prior-year quarter to $668.3 million. ADV was 21.8 million contracts, up 6% year over year. Full-Year Highlights
Adjusted earnings per share of $7.97 beat the Zacks Consensus Estimate of $7.95. The bottom line increased 19.3% year over year.
CME Group’s revenues of $1.2 billion increased 7% year over year. The top line was almost in line the Zacks Consensus Estimate. Non-U.S. ADV was a record 6.3 million contracts, up 15% from 2021. Financial Update
As of Dec 31, 2022, CME Group had $2.8 billion of cash and marketable securities, down 5.2% from 2021 end. As of Dec 31, 2022, long-term debt of $3.4 billion increased 26.9% from 2021 end.
As of Dec 31, 2022, CME had total equity worth $26.9 billion, down 1.9% from 2021 end. Capital Deployment
CME Group paid out $3 billion in dividends, including an annual variable dividend of $1.6 billion, taking the payout to $20.5 billion since the implementation of the variable dividend policy in early 2012.
On Feb 2, 2023, CME declared first-quarter dividend of $1.10 per share, representing a 10% increase from the prior payout. How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
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.
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions has been net zero. Notably, CME has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
CME belongs to the Zacks Securities and Exchanges industry. Another stock from the same industry, MarketAxess (
MKTX Quick Quote MKTX - Free Report) , has gained 0.3% over the past month. More than a month has passed since the company reported results for the quarter ended December 2022.
MarketAxess reported revenues of $177.9 million in the last reported quarter, representing a year-over-year change of +7.8%. EPS of $1.58 for the same period compares with $1.37 a year ago.
MarketAxess is expected to post earnings of $1.95 per share for the current quarter, representing a year-over-year change of +12.7%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.5%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for MarketAxess. Also, the stock has a VGM Score of D.