CME Group Inc.
) reported first-quarter 2013 operating earnings per share of 73
cents. The result was in line with the Zacks Consensus Estimate
of 73 cents but lagged the year-ago quarter's earnings of 80
Operating net income dipped 8.3% year over year to $244.4
million. This excluded the after-tax effect of foreign exchange
transaction losses of $8.6 million during the reported quarter.
Including these adjustments, the quarterly GAAP net income was
$235.8 million or 71 cents per share as compared with $266.6
million or 80 cents per share in the year-ago period.
CME Group's total revenue for the reported quarter declined
7.2% year over year to $718.6 million. However, it topped the
Zacks Consensus Estimate of $714 million.
The year-over-year drop was primarily due to a decline in
clearing and transaction fees as a result of poor volumes in the
energy and agriculture commodity products along with decreased
average rate per contract. Even revenue from market data and
information services witnessed deterioration. These were
marginally offset by marginal improvement in average daily
CME Group's average daily volume inched up 1% year over year
to 12.5 million contracts in the reported quarter, rebounding
since the third quarter of 2011. The improvement was driven by
interest rate, foreign exchange and equity products. However,
total average rate per contract dipped 3% from the year-ago
quarter to 78.5 cents. The volumes constitute mostly of
lower-priced products across asset-class that require higher
clearing and transaction fees
decreased 4.5% year over year to $593.2 million, while accounting
for about 83% of the total revenue. Additionally, revenue from
and information services
decelerated 29.2% year over year to $80.9 million. However,
access and communication fee
increased 9.1% year over year to $215 million, whereas
revenue surged 17.3% year over year to $23.0 million.
However, total operating expenses declined 3.2% year over year
to $313.1 million. Operating income fell 10.1% year over year to
$405.5 million, whereas operating margin deteriorated to 56.4%
from 58.2% in the year-ago quarter.
Meanwhile, CME Group recorded a non-operating expense of $17.9
million against $17.8 million in the year-ago quarter, primarily
owing to higher interest and borrowing costs.
As of Mar 31, 2013, CME Group had $1.9 billion of cash and
marketable securities, higher than $1.66 billion at 2012-end,
while long-term debt stood at $1.36 billion, lower than the $2.11
billion at 2012-end.
As of Mar 31, 2013, CME Group had total assets of $42.42
billion (up from $38.86 billion as of Dec 31, 2012), while total
shareholders' equity stood at $21.55 billion (up from $21.42
billion as of Dec 31, 2012). The company did not repurchase
shares during the reported quarter.
On Jan 30, 2013, the board of CME Group declared a regular
first-quarter dividend of 45 cents per share, which was paid on
Mar 25, 2013 to shareholders of record Mar 8, 2013.
CME Group carries a Zacks Rank #3 (Hold). Other performers in
the financial sector include
CBOE Holding Inc.
), all of which carry a Zacks Rank #2 (Buy).
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