Global futures exchange
CME Group Inc.
) is scheduled to release second-quarter 2014 financial results
before the opening bell on Jul 31.
In the last reported quarter, the company posted break-even
results, although the four-quarter trailing average beat is pegged
at 0.5%. Let us see how things are shaping up for this
Factors at Play
CME Group's average daily volumes fell 12% year over year in the
second quarter due to lower rate per contracts and sluggish
volatility. Trading volumes account for a substantial portion of
transaction fees revenues, a major revenue driver for the
Alongside, higher operating and interest expenses as well as
capital expenditure are likely to adversely affect operating
margins, which has been below the historical average of +60% over
the last several quarters.
Moreover, risks from OTC markets and lack of any significant
growth catalyst amid stiff competition and stringent regulations
pose operational and financial risks. Alongside, a weak capital
market and limited fund resources have compelled CME Group to delay
its current share repurchase program, although dividend payouts
continue to retain investors' confidence.
Our proven model shows that CME Group is unlikely to beat
earnings as it lacks the required combination of two key
: CME Group has a negative Zacks ESP. That is because the
, which represents the difference between the Most Accurate
estimate of 79 cents per share and the Zacks Consensus Estimate of
80 cents, is -1.25%.
: CME Group has a Zacks Rank #4 (Sell). We caution against stocks
with Zacks Rank #4 and 5 (Sell-rated stocks) going into an earnings
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 quarter:
Qiwi Plc (
) has Earnings ESP of +4.76% and a Zacks Rank #1 (Strong Buy).
United Insurance Holdings Corp. (
) has Earnings ESP of +2.33% and a Zacks Rank #1.
Lazard Ltd. (
) has Earnings ESP of +1.59% and a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
CME GROUP INC (CME): Free Stock Analysis Report
LAZARD LTD (LAZ): Free Stock Analysis Report
QIWI PLC-ADR (QIWI): Free Stock Analysis Report
UTD INSURANCE (UIHC): Free Stock Analysis
To read this article on Zacks.com click here.