CME Group's Top and Bottom Lines Jump on Trading Surge

By Ezequiel Minaya 

CME Group Inc. reported Thursday that surging energy and metal markets helped propel revenue and income higher during the latest quarter.

The Chicago-based futures market -- the world's biggest -- generates most of its revenue from transaction fees, which rise and fall with trading volume.

For the latest quarter, CME said average daily volume rose 24% to 16.3 million contracts compared with last year. Clearing and transaction fees rose to $768.5 million from $678 million.

Energy and metals trading jumped, with volumes rising 27% and 49%, respectively. Meanwhile, equity edged up 4.8% and agricultural commodities slumped slightly, retreating 0.6%.

Exchanges including CME have worked to diversify their businesses, with some focusing on data provision as a source of steady revenue to lean on when turbulent markets result in lower trading fees. For CME, data revenue growth has been slowing in recent quarters, registering 1% growth in the latest quarter.

Quarterly results beat Wall Street expectations.

In all, CME reported a profit of $373.4 million, or $1.10 a share, up from $291.7 million, or 86 cents, a year earlier. Excluding certain items, profit rose to $1.14 from 97 cents.

Revenue improved 12% to $912.9 million.

Analysts had projected $1.11 in earnings per share and $903.7 million in revenue, according to Thomson Reuters.

Shares in the company were inactive premarket.

The Chicago-based exchange operator late last year launched an ad campaign aimed at attracting retail customers, which regulators discourage because of the risk involved in the futures market.

Futures markets are dominated by professional traders, commodities firms and financial institutions. Though a small portion of the market, retail trading is growing. Between 5% and 10% of CME's trading volume comes from retail customers, a percentage that has roughly doubled since 2012.

--Alexander Osipovich contributed to this article.

Write to Ezequiel Minaya at [e-mail]

(END) Dow Jones Newswires

February 02, 2017 08:24 ET (13:24 GMT)

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