CME Group Inc. CME reported second-quarter 2015 adjusted earnings per share of 95 cents that beat the Zacks Consensus Estimate of 92 cents by 3.3% and surged 23.4% from the year-ago figure of 77 cents.
The upside came on the back of solid top-line growth as well as disciplined expense management.
Net income declined year over year by a penny to 78 cents.
CME Group’s total revenue increased 12.2% year over year to $820 million and surpassed the Zacks Consensus Estimate of $819 million. The upside was primarily attributable to improvement in clearing and transaction fees, market data and information services, and from access and communication fees. Additionally, rise in the trading volume also boosted the revenues.
The company’s average daily volume jumped 6% year over year to 13.3 million contracts in the reported quarter. Higher revenues from agricultural commodities, foreign exchange and energy led to the improvement. Moreover, total average rate per contract of 77.7 cents was higher than 75.3 cents in the year-ago quarter.
CME Group’s clearing and transaction fees grew 12% year over year to $681.8 million. This accounts for about 83% of the total revenue. Additionally, revenues from market data and information services increased 14.7% to $102.8 million. Revenues from access and communication fees rose 5.4% to $21.5 million, other revenues improved to $13.9 million from $12.3 million in the year-ago quarter.
However, total operating expenses rose 1.6% year over year to $324.9 million in the quarter. Nevertheless, operating income surged 20.2% to $495.1 million.
CME Group recorded non-operating expenses of $47 million as against an income of $10.1 million in the year-ago quarter. This reflects higher borrowing costs and lower equity and investment earnings in the reported quarter.
Financial Update
As of Jun 30, 2015, CME Group had $1.2 billion of cash and marketable securities, lower than $1.44 billion at year-end 2014, while long-term debt was $2.24 billion, up from $2.11 billion at the end of 2014.
As of Jun 30, 2015, the company had total assets worth $73.7 billion (up from $72.2 billion as of Dec 31, 2014). CME Group did not repurchase any shares during the reported quarter.
Dividend Update
During the quarter the company paid dividend worth $168 million.
Zacks Rank
Currently, CME Group holds a Zacks Rank #2 (Buy).
Peer Take
MarketAxess Holdings Inc.’s MKTX second-quarter earnings per share of 64 cents were in line with the Zacks Consensus Estimate. However, results improved year over year by 33.3%.
Nasdaq OMX Group Inc. NDAQ reported record second-quarter 2015 operating earnings per share of 83 cents, which surpassed the Zacks Consensus Estimate of 80 cents by 3.7%.
Markit Ltd. MRKT, which holds the same Zacks Rank as CME Group, is scheduled release its second-quarter earnings before the opening bell on Aug 12, 2015.
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