CME Group Profits Rise as Markets Stabilize

By Lisa Beilfuss 

CME Group Inc. said profit climbed in the first quarter as trading volume continued to snap back after a rocky end to 2015.

Earnings met analysts' expectations, while the company's 11% revenue increase edged in below estimates.

The world's biggest futures market, based in Chicago, generates most of its revenue from transaction fees, which rise and fall with trading volume. Like other exchange operators, including CBOE Holdings Inc. and Intercontinental Exchange Inc., CME saw record trading volume in 2015. Volume slid at the end of the year, though, as some investors and traders backed away from certain corners of the market, swooning from global growth concerns and tumbling oil prices.

But in the first quarter, total volume rose 13% from a year earlier and 29% from the fourth quarter as fears over the global economy eased and markets stabilized. CME President Terry Duffy highlighted record volumes in energy and options, and he noted a 24% jump in trading on the exchange from outside of the U.S.

As trading activity turned higher, CME booked clearing and transaction fees that rose 12% from a year earlier, to $796.1 million. Such fees represented 85% of the company's top line.

Market data revenue, meanwhile, rose 5.5%, slowing from an 11% clip in the fourth quarter. Exchanges including CME have worked to diversify their businesses, with some focusing on data provision as a source of steady revenue. New York Stock Exchange owner Intercontinental Exchange Inc., for example, paid $5.2 billion to acquire financial-data provider Interactive Data Corp. late last year.

In all, CME reported a profit of $367 million, or $1.09 a share, up from $330.4 million, or 98 cents a share, a year earlier. Excluding a loss stemming from a data center lease-back transaction, among other items, earnings per share rose to $1.15 from 98 cents.

Revenue rose to $934.2 million from $842.7 million. Analysts projected $1.15 in adjusted per-share profit on $936.1 million in revenue, according to Thomson Reuters.

Shares in the company, up 4.3% since the start of the year, were inactive in premarket trading.

Write to Lisa Beilfuss at [e-mail]

(END) Dow Jones Newswires

April 28, 2016 08:29 ET (12:29 GMT)

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