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CME Group (CME) Q3 Earnings Top Estimates, Revenues Rise Y/Y

CME Group (CME) Q3 results reflect higher clearing and transaction fees, increased market data and information services revenues, and lower expenses as well as an increase in average daily volume...

This story originally appeared on Zacks

CME Group Inc. CME reported third-quarter 2021 adjusted earnings per share of $1.60, which beat the Zacks Consensus Estimate of $1.55. The bottom line increased 15.9% year over year due to higher clearing and transaction fees, increased market data and information services revenues, and lower expenses. Average daily volume increased in two of the six products lines.

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CME Group Inc. Price, Consensus and EPS Surprise

Performance in Detail

CME Group’s revenues of $1.1 billion increased 2.7% year over year. The year-over-year increase was primarily due to higher clearing and transaction fees (up 5.2% year over year) and market data and information services (up 4.3% year over year), partly offset by lower other revenues (down 19.2% year over year). The top line was almost in line with the Zacks Consensus Estimate.

Total expenses decreased 10.7% year over year to $496.2 million during the reported quarter, attributable to lower compensation and benefits, professional fees and outside services and amortization of purchased intangibles.

Operating income increased 16.9% from the prior-year quarter to $613.7 million.

Average daily volume improved nearly 14% to 17.8 million led by double-digit growth in interest rates, energy and options products, as well as strong non-U.S. volumes, which increased 13% to 5 million contracts per day. The average rate per contract decreased 5.4%.

Financial Update

As of Sep 30, 2021, CME Group had $1.6 billion of cash and marketable securities, down 5.9% from 2020 end. As of Sep 30, 2021, long-term debt of nearly $3 billion was down 21.7% from 2020 end.

As of Sep 30, 2021, the company had total equity worth $27.3 billion, up 3.5% from 2020 end.

Capital Deployment

The company paid out dividends of $323 million in the third quarter. CME Group has returned more than $16.3 billion to shareholders in the form of dividends since the implementation of the variable dividend policy in early 2012.

Zacks Rank

CME Group currently carries a Zacks Rank #3 (Hold).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Securities Exchange Industry Players

Third-quarter earnings of Nasdaq NDAQ and MarketAxess Holdings MKTX beat the respective Zacks Consensus Estimate.

Upcoming Release

Cboe Global Markets CBOE is scheduled to release third-quarter earnings on Oct 29. The Zacks Consensus Estimate for the third quarter is pegged at $1.43.

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