CME Group Third Quarter Results Top Estimates

(RTTNews) - Exchange operator CME Group, Inc. (CME) reported Monday a profit for the third quarter that increased from last year, reflecting revenue growth amid higher clearing and transaction fees. Adjusted earnings per share and quarterly revenues also topped 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.

"Our business continued to trend positively in the third quarter, as demand for our products increased in several major categories, most notably our over-the-counter interest rate swap clearing. We experienced an increase in dealer-to-client market share from 5 percent in the first quarter of this year to 31 percent in the third quarter, in addition to approaching 50 percent of open interest," Executive Chairman and President Terry Duffy said in a statement.

Chicago, Illinois-based CME reported net income of $236.7 million or $0.71 per share for the third quarter, higher than $218.0 million or $0.66 per share in the prior-year quarter.

Excluding items, adjusted net income for the latest quarter was $250.3 million or $0.75 per share. On average, 19 analysts polled by Thomson Reuters expected the company to report earnings of $0.73 per share for the quarter. Analysts' estimates typically exclude one-time items.

Total revenues for the quarter grew 4.6 percent to $714.6 million from $683.20 million in the same quarter last year, and topped seventeen Wall Street analysts' consensus estimate of $713.28 million by a whisker.

Clearing and transaction fees for the quarter increased 6.4 percent to $597.9 million, while market data and information services revenues declined 5 percent to $78.6 million from the year-ago quarter. Access and communication fees also decreased 12.5 percent to $20.3 million from last year.

"Third-quarter 2013 top-line results included substantial progress in our core business as well as expansion in over-the-counter clearing. Average daily volume was up 11 percent, driven primarily by continued strong performance in our interest rate and metal complexes, as well as strong growth in our options products, which increased by 31 percent," CEO Phupinder Gill stated.

Average daily trading volume for the quarter edged up 11 percent from the year-ago quarter to 10.84 million contracts, including 29 percent growth in interest rate volume and 10 percent growth in metal volume. This drove the improvement in clearing and transaction fee revenues.

However, total average rate per contract declined to 76.2 cents from 82.2 cents last year, driven primarily by strong higher paying, non-member participation.

Electronic trading volumes outside the U.S. grew 16 percent from last year, with volumes rising 23 percent in Latin America, 22 percent in Asia and 15 percent in Europe.

CME closed Friday's regular trading session at $74.70, up $0.50 on a volume of 1.37 million shares. In the past 52-week period, the stock has been trading in a range of $49.79 to $79.45.