CME Group Earnings: A Mixed Picture

S&P 500 (NYSE:SPY) component CME Group Inc. (NASDAQ:CME) posted a decrease in profit as revenue declined. CME Group provides risk management and investment services to customers, including professional traders, financial institutions, investors, corporations, manufacturers, and governments.

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CME Group Earnings Cheat Sheet for the Third Quarter

Results: Net income for the securities exchanges fell to $218 million (66 cents per share) vs. $316.1 million (95 cents per share) a year earlier. This is a decline of 31% from the year-earlier quarter.

Revenue: Fell 21.8% to $683.2 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: CME Group Inc. reported adjusted net income of 70 cents per share. By that measure, the company beat the mean estimate of 69 cents per share. It fell short of the average revenue estimate of $796.2 million.

Quoting Management: “During the quarter, we continued to expand our industry-leading portfolio of diverse products as part of growing our global footprint,” said CME Group Chief Executive Officer Phupinder Gill. “We strengthened our OTC product offering by announcing the launch of a deliverable interest rate swap futures product and portfolio margining of interest rate swaps and futures positions for customer accounts. With Dodd-Frank regulation driving changes in OTC energy markets, we also are working on providing flexible means of execution for participants in these markets.”

Key Stats:

The company has now seen net income fall in each of the last three quarters. In the second quarter, net income fell 16.6% from the year earlier, while the figure fell 41.6% in the first quarter.

The company has now beaten estimates the last two quarters. In the second quarter, it topped expectations with net income of 89 cents versus a mean estimate of net income of 82 cents per share.

Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the fourth quarter is 75 cents per share, down from 82 cents ninety days ago. For the fiscal year, the average estimate has moved down from $3.28 a share to $3.13 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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