CME Group Inc. Earnings: Profit Rises for Fourth Straight Quarter

S&P 500 (NYSE:SPY) component CME Group Inc. (NASDAQ:CME) reported its results for the fourth quarter. 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 Fourth Quarter

Results: Net income for CME Group Inc. rose to $745.9 million ($11.25 per share) vs. $196.2 million ($2.93 per share) in the same quarter a year earlier. This is a more than threefold rise from the year earlier quarter.

Revenue: Revenue was $599.1 million last quarter.

Actual vs. Wall St. Expectations: CME Group Inc. reported adjusted net income of $3.55 per share. By that measure, the company fell short of mean estimate of $3.67 per share. It fell short of the average revenue estimate of $754 million.

Quoting Management: “Despite a very challenging environment, 2011 was another productive year for CME Group,” said CME Group Executive Chairman Terry Duffy. “During the year we delivered the highest volume in our history, approaching 3.4 billion contracts traded. We have performed well navigating through uncertain events such as the Fed’s zero interest rate policy, the Eurozone crisis and the final rulemaking for Dodd-Frank. As market participants adjusted to these factors during the fourth quarter, 2012 has started out strong, with open interest up 11 percent to date.”

Key Stats:

The company has now seen net income rise in three straight quarters. In the third quarter, net income rose 29.4% and in the second quarter, the figure rose 8.5%.

The company fell short of forecasts after beating estimates in the previous two quarters. In the third quarter, it topped the mark by 10 cents, and in the second quarter, it was ahead by 21 cents.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the first quarter of the next fiscal year has moved down from $4.70 a share to $4.41 over the last ninety days. For the fiscal year, the average estimate has moved down from $17.46 a share to $17.18 over the last ninety days.

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

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To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com