Global futures exchange
CME Group Inc.
) is scheduled to release its first-quarter 2014 financial
results before the opening bell on May 1.
In the last reported fourth-quarter 2013, the company had
delivered a 4.5% negative earnings surprise, although the
four-quarter trailing average beat is pegged at 0.5%. Let's see
how things are shaping up for this announcement.
Factors Grabbing Our Attention
CME Group is poised to benefit from a diverse derivative-
product line and gradual clearance of regulatory clouds should
drive volumes in the future, although it also indicates higher
infrastructure costs. The upcoming launch of derivatives exchange
in London, after being twice delayed and approved in Mar 2014,
along with the launch of Euro-denominated deliverable interest
rate swaps (IRS) Futures (Euro DSF) contracts in Apr 2014 should
help boost momentum.
However, interest rate volatility, higher tax rate, risks from
OTC markets and lack of a significant growth catalyst amid
intense competition pose operational and financial risks.
Alongside, a weak capital market and limited fund resources have
also impelled CME Group to delay its current share repurchase
program, although dividend payouts continue to sustain investor
Although the current scenario appears bleak, CME Group's
efforts to promote, expand and cross-sell its core
exchange-traded business through strategic alliances, meaningful
acquisitions and latest product initiatives along with its global
presence augur decent growth.
Our proven model shows that CME Group is unlikely to beat
earnings as it lacks the required combination of two key
: The Most Accurate estimate of 83 cents per share is at par with
the Zacks Consensus Estimate of CME Group. Hence, the Expected
Surprise Prediction or
, which is the difference between the aforementioned estimates,is
: CME Group has a Zacks Rank #3 (Hold). Note that stocks with
Zacks Rank #1, 2 and 3 have significantly higher chances of
beating earnings. Conversely, Sell-rated stocks (#4 and 5) are
kept under the radar and are never considered going into the
The combination of CME Group's Zacks Rank #3 and 0.00% ESP
makes surprise prediction difficult.
Other Stocks to Consider
Here are some other financial companies you may want to
consider as our model shows they have the right combination of
elements to post an earnings beat this coming quarter:
Everest Re Group Ltd.
), earnings ESP of +7.85% and a Zacks Rank #1 (Strong Buy).
), earnings ESP of +1.82% and a Zacks Rank #1.
CBOE Holdings Inc.
), earnings ESP of +3.70% and a Zacks Rank #3 (Hold).
CBOE HOLDINGS (CBOE): Free Stock Analysis
CME GROUP INC (CME): Free Stock Analysis
LAZARD LTD (LAZ): Free Stock Analysis Report
EVEREST RE LTD (RE): Free Stock Analysis
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