CME Group Fourth Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component CME Group (NASDAQ:CME) will unveil its latest earnings on Tuesday, February 5, 2013. CME Group provides risk management and investment services to customers, including professional traders, financial institutions, investors, corporations, manufacturers, and governments.

CME Group Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of 63 cents per share, a decline of 11.3% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 66 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 63 cents during the last month. For the year, analysts are projecting profit of $3.03 per share, a decline of 11.1% from last year.

Past Earnings Performance: The company is looking to make a streak of three quarters of beating estimates. Last quarter, it beat expectations by reporting net income of 70 cents per share, and the previous quarter, it had profit of 89 cents.

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A Look Back: In the third quarter, profit fell 31% to $218 million (66 cents a share) from $316.1 million ($4.74 a share) the year earlier, but exceeded analyst expectations. Revenue fell 19.8% to $683.2 million from $851.7 million.

Wall St. Revenue Expectations: On average, analysts predict $662 million in revenue this quarter, a decline of 10.5% from the year-ago quarter. Analysts are forecasting total revenue of $2.91 billion for the year, a decline of 11.3% from last year’s revenue of $3.28 billion.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.19 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company regressed in this liquidity measure from 1.24 in the second quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 26% to $8.39 billion while assets rose 21.5% to $10.02 billion.

Key Stats:

After experiencing income drops the past three quarters, the company is hoping to use this earnings announcement to rebound. Net income fell 41.6% in the first quarter, by 16.6% in the second quarter and again in the third quarter.

On the top line, the company is hoping to use this earnings announcement to snap a string of three-straight quarters of revenue declines. Revenue fell 6.9% in the first quarter and 5.1% in second quarter before falling again in the third quarter.

Analyst Ratings: With seven analysts rating the stock as a buy, three rating it as a sell and five rating it as a hold, there are indications of a bullish outlook.

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