CME Group Profit Soars on Volume, Data Growth
29 October 2015 - 11:12PM
Dow Jones News
By Lisa Beilfuss
CME Group Inc., the world's biggest futures-market operator,
said profit soared in its third quarter, lifted by higher trading
volume and growth in the company's market data and information
services business.
The company's results easily beat Wall Street's
expectations.
CME recently closed most of its trading pits in New York and
Chicago as traders increasingly execute buy and sell orders
electronically. Chief Executive Phupinder Gill said that in the
third quarter, CME saw its highest percentage of volume traded
electronically.
While many firms have reported that tumultuous markets cut into
third-quarter earnings, CME benefited from busier markets--spooked
by growth concerns and a slowdown in China. Total trading volume
during the period rose 7%. Mr. Gill said the company hit record
levels of options volume and saw double-digit growth across
commodities contracts.
Equity volume snapped its decline and jumped 27%, while energy
volume rose 26% and foreign exchange volume gained 7.3%. Strength
in those product lines offset a 7.3% drop in interest-rate volume.
Interest-rate contracts account for nearly half of CME's overall
exchange volume.
CME has been working to grow its international presence, and
global activity reached a record 32% during the quarter.
The exchange operator said the total average rate per contract
rose 4.7% to 75.9 cents, thanks to a higher proportion of total
volume coming from commodities products; commodities products
generate higher average fees. Clearing and transaction fees grew
11% to $715 million.
Revenue from market data, meanwhile, increased 13%. Earlier this
week, rival exchange operator Intercontinental Exchange Inc., owner
of the New York Stock Exchange, agreed to buy financial-data
provider Interactive Data Corp. for $5.2 billion, a move to beef up
its fast-growing data business.
Overall, CME reported a profit of $359.9 million, or $1.06 a
share, up from $290 million, or 86 cents, a year earlier. Excluding
certain items, earnings per share rose to $1.02 from 84 cents.
Revenue grew 12% to $850.3 million. Analysts projected 99 cents in
per-share profit on $853.1 million in revenue, according to Thomson
Reuters.
Shares in the company, up about 8% this year, were inactive
premarket.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
October 29, 2015 07:57 ET (11:57 GMT)
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