CME Group's Results Top Expectations

CME Group Inc., the world's biggest futures-market operator, said second-quarter profit edged slightly higher, lifted by higher trading volume in some products and reigned-in expenses.

The company's results beat Wall Street expectations.

Total average daily volume improved steadily after a slow April, said Chief Executive Terry Duffy, adding that options volume continued to expand.

The company, which recently closed most of its trading pits in New York and Chicago as traders increasingly execute buy and sell orders electronically, said contract volume grew 6% in the latest quarter. Increases in agricultural commodities, foreign exchange and energy volume—each grew 20% or more—offset declines in interest-rate and equity volumes.

Trading in interest-rate contracts, which make up about half of CME's overall volume, fell 1.3% from a year earlier and 13% from the first quarter. The declines came despite a trifecta of factors—threats of a Greek exit from the eurozone, a potential Puerto Rican default and a sharp selloff in Chinese stock markets—that sent investors back to haven assets.

Equity-contract volume, meanwhile, fell 4.1% from a year ago.

The exchange operator said the total average rate per contract rose 3.2% to 77.7 cents, thanks to a higher proportion of total volume coming from commodities products. Commodities products have higher average fees.

CME, which has been working to cut costs, said that in addition to closing trading pits, it reduced head count and consolidated data centers. Gross margin during the quarter expanded to 60.4% from 56.3% a year earlier.

In all, second-quarter profit rose to $265 million from $263.8 million in the year-ago period. On a per-share basis, earnings slipped a penny to 78 cents. Excluding one-time items, per-share profit rose to 95 cents from 77 cents.

Revenue grew 12% to $820 million.

Analysts projected 92 cents in earnings per share on $807.2 million in revenue, according to Thomson Reuters.

Market-data revenue rose 15% to $103 million.

Write to Lisa Beilfuss at [e-mail]

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