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Why Is CME Group (CME) Up 2.3% Since the Last Earnings Report?
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It has been about a month since the last earnings report for CME Group Inc. (CME - Free Report) . Shares have added about 2.3% in that time frame, underperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? 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 catalysts.
CME Group Tops Q4 Earnings, Trading Volumes Surge
CME Group reported fourth-quarter 2016 adjusted earnings per share of $1.14, beating the Zacks Consensus Estimate of $1.10. The bottom line also improved 17.5% from the year-ago quarter.
Results were primarily aided by higher revenues, partially offset by increased expenses. The quarter witnessed solid growth in average daily volume (ADV) amid increased volatility driven by the U.S. presidential election and the December Fed rate hike as well.
Adjusted net income of $387.3 million increased 18.4% year over year.
Including one-time items, net income was $373.4 million or $1.10 per share in the reported quarter, compared to $291.7 million or 86 cents per share.
For full-year 2016, adjusted earnings per share of $4.53 outpaced the Zacks Consensus Estimate of $4.49. , it improved from the prior-year figure of $4.05. Net income for 2016 was $1.54 billion, up 12.3% from the prior year.
Performance in Detail
Revenues for 2016 came in at $3.60 billion, up 8.1% year over year. The figure also came above the Zacks Consensus Estimate of $3.58 billion.
For fourth-quarter 2016, CME Group posted total revenue of $912.9 million, surpassing the Zacks Consensus Estimate of $906 million. Revenues also climbed 12.2% year over year. The increase was driven by growth in all revenue components, including clearing and transaction fees, and market data and information services revenues.
Total expenses were up 8.4% year over year at $372.7 million during the reported quarter.
Operating income improved about 15% to $540.2 million from the prior-year quarter.
ADV surged 24% year over year to 16.3 million contracts in the reported quarter. However, total average rate per contract of $0.731 declined from $0.789 in the year-ago quarter.
For 2016, ADV was a record 15.6 million contracts, jumping 12% year over year. The year witnessed strong performance in interest rates, agricultural commodities, energy, metals, total options and electronic options.
Financial Update
As of Dec 31, 2016, CME Group had $1.95 billion of cash and marketable securities, higher than $1.77 billion at year-end 2015. Long-term debt of $2.23 billion as of Dec 31, 2016, remained largely stable with the prior-year period.
As of Dec 31, 2016, the company had total assets worth $69.4 billion including trading products (intangible assets) of $17.2 billion.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
At this time, the CME Group stock has a poor Growth Score of 'F', however its Momentum is doing a bit better with a 'D'. The stock was allocated a grade of 'F' on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate investors will probably be better served looking elsewhere.
Outlook
The stock has a Zacks Rank #4 (Sell). We are expecting an below average return from the stock in the next few months.
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Why Is CME Group (CME) Up 2.3% Since the Last Earnings Report?
It has been about a month since the last earnings report for CME Group Inc. (CME - Free Report) . Shares have added about 2.3% in that time frame, underperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? 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 catalysts.
CME Group Tops Q4 Earnings, Trading Volumes Surge
CME Group reported fourth-quarter 2016 adjusted earnings per share of $1.14, beating the Zacks Consensus Estimate of $1.10. The bottom line also improved 17.5% from the year-ago quarter.
Results were primarily aided by higher revenues, partially offset by increased expenses. The quarter witnessed solid growth in average daily volume (ADV) amid increased volatility driven by the U.S. presidential election and the December Fed rate hike as well.
Adjusted net income of $387.3 million increased 18.4% year over year.
Including one-time items, net income was $373.4 million or $1.10 per share in the reported quarter, compared to $291.7 million or 86 cents per share.
For full-year 2016, adjusted earnings per share of $4.53 outpaced the Zacks Consensus Estimate of $4.49. , it improved from the prior-year figure of $4.05. Net income for 2016 was $1.54 billion, up 12.3% from the prior year.
Performance in Detail
Revenues for 2016 came in at $3.60 billion, up 8.1% year over year. The figure also came above the Zacks Consensus Estimate of $3.58 billion.
For fourth-quarter 2016, CME Group posted total revenue of $912.9 million, surpassing the Zacks Consensus Estimate of $906 million. Revenues also climbed 12.2% year over year. The increase was driven by growth in all revenue components, including clearing and transaction fees, and market data and information services revenues.
Total expenses were up 8.4% year over year at $372.7 million during the reported quarter.
Operating income improved about 15% to $540.2 million from the prior-year quarter.
ADV surged 24% year over year to 16.3 million contracts in the reported quarter. However, total average rate per contract of $0.731 declined from $0.789 in the year-ago quarter.
For 2016, ADV was a record 15.6 million contracts, jumping 12% year over year. The year witnessed strong performance in interest rates, agricultural commodities, energy, metals, total options and electronic options.
Financial Update
As of Dec 31, 2016, CME Group had $1.95 billion of cash and marketable securities, higher than $1.77 billion at year-end 2015. Long-term debt of $2.23 billion as of Dec 31, 2016, remained largely stable with the prior-year period.
As of Dec 31, 2016, the company had total assets worth $69.4 billion including trading products (intangible assets) of $17.2 billion.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
CME Group Inc. Price and Consensus
CME Group Inc. Price and Consensus | CME Group Inc. Quote
VGM Scores
At this time, the CME Group stock has a poor Growth Score of 'F', however its Momentum is doing a bit better with a 'D'. The stock was allocated a grade of 'F' on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate investors will probably be better served looking elsewhere.
Outlook
The stock has a Zacks Rank #4 (Sell). We are expecting an below average return from the stock in the next few months.