CME Group's Profit Drops
06 February 2016 - 12:30AM
Dow Jones News
CME Group Inc. said its fourth-quarter profit declined as the
world's biggest futures-market operator generated less revenue from
transaction and clearing fees amid lower trading volume.
Still, results exceeded Wall Street's expectations.
Like other exchange operators, including CBOE Holdings Inc. and
Intercontinental Exchange Inc., CME saw record trading volume in
2015. But volume fell off at the end of the year as some investors
and traders backed away from certain corners of the market,
swooning from global growth concerns and tumbling oil prices.
Volume in the fourth quarter fell 11% from a year earlier,
pushing transaction fee revenue 5% lower to $679 million. Fees
account for most of CME's revenue. Higher trading volume in energy
contracts partially offset declines in equity, interest rates and
currencies.
And like its peers, CME said volume snapped back at the start of
the year, rising 16% in January.
Meanwhile, market data revenue increased 11% from the year-ago
quarter, to $99 million. The exchange operator has been working to
grow its international presence and has been beefing up its market
data business. In October, Chief Financial Officer John Pietrowicz
cautioned that revenue from the segment would slip modestly in the
fourth quarter. In the third quarter, the segment posted $99.5
million in revenue.
Over all, CME reported a profit of $291.7 million, or 86 cents a
share, down from $306.5 million, or 91 cents, a year earlier.
Excluding certain items, earnings per share fell to 92 cents from
95 cents.
Revenue slipped 3.3% to $813.8 million. Analysts projected 90
cents in adjusted earnings per share on $810.8 million in revenue,
according to Thomson Reuters.
CME has been focused on cost management, and a 7% reduction in
expenses helped buoy the bottom line.
Separately this week, the company raised its quarterly dividend
20% to 60 cents a share.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
(END) Dow Jones Newswires
February 05, 2016 08:15 ET (13:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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