By Lisa Beilfuss
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 lisa.beilfuss@wsj.com
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