CME Group Q4 Profit Up 16%, But Results Miss View

(RTTNews) - Exchange operator CME Group, Inc. (CME) on Tuesday reported a 16 percent increase in profit for the fourth quarter from last year on higher clearing and transaction fees. Average daily volume for the quarter rose 11 percent. However, both revenue and adjusted earnings per share missed analysts' expectations.

CME, formerly known as Chicago Mercantile Exchange Holdings Inc., is the operator of the CME as well as the New York Mercantile Exchange or NYMEX.

For the fourth quarter, net income attributable to the Chicago, Illinois-based company was $193.1 million or $0.58 per share, up from $166.8 million or $0.50 per share in the year-ago period.

Excluding items, adjusted earnings for the quarter were $214.3 million or $0.64 per share. On average, 18 analysts polled by Thomson Reuters expected the company to report earnings per share of $0.68 for the quarter. Analysts' estimates typically exclude one-time items.

Total revenue for the quarter grew 4 percent to $687 million from $660.9 million in the same period last year, but missed analysts' consensus estimates of $691.29 million.

Clearing and transaction fees for the quarter increased 6 percent to $576.8 million, while market data and information services revenues declined 4 percent to $76.5 million. Access and communication fees also decreased 11 percent from last year to $12.9 million.

Average daily volume in the quarter was 11.33 million contracts, up 11 percent from the year-ago period, and included 29 percent growth in interest rate volume.

However, total average rate per contract declined to 78 cents from 83.1 cents in the same period last year.

For fiscal 2013, net income attributable to CME Group was $976.8 million or $2.92 per share, up from $896.3 million or $2.70 per share in the prior year. Revenues for the year rose to $2.94 billion from $2.91 billion in the previous year.

Street expected the company to earn $3.10 per share for the year on revenues of $2.93 billion.

In a separate statement, CME Group said that January 2014 volume averaged 12.9 million contracts per day, up 13 percent from the year-ago period. Total volume for the month was 271 million contracts, of which 85 percent was traded electronically.

Phupinder Gill, chief executive officer of CME Group said, "The new year is off to a good start, with increased volatility in interest rate, equity, and energy markets resulting in an increase of 13 percent in average daily volume in January. Looking ahead, we will continue to build on the most extensive product offering available today to deliver innovative solutions to meet our customers' needs."

CME closed Monday's trading session at $73.18, down $1.58 or 2.11 percent on a volume of 2.65 million shares.