CME Group (CME) Q3 Earnings and Revenues Miss Estimates

CME Group Inc. CME reported third-quarter 2020 adjusted earnings per share of $1.38, which missed the Zacks Consensus Estimate by 2.1%. The bottom line decreased 27.4% year over year due to lower clearing and transaction fees. Average daily volume decreased in three out of the six products lines.

Nonetheless, the company noted metals, equities, agriculture and data services businesses showed strong performance during the third quarter.

Performance in Detail

CME Group’s revenues of $1.1 billion decreased 15.4% year over year. The year-over-year decrease is primarily attributable to lower clearing and transaction fees (down 19.7% year over year), partially offset by higher market data and information services (up nearly 7.4% year over year). The top line missed the Zacks Consensus Estimate by 1%.

Total expenses decreased 6.1% year over year to $555.7 million during the reported quarter, attributable to lower compensation and benefits, technology, amortization of purchased intangibles, depreciation and amortization as well as other expenses.

Operating income decreased 23.3% from the prior-year quarter to $525 million.

Average daily volume decreased 22.9% year over year to 15.6 million contracts in the quarter. Average rate per contract increased 3.3%.

CME Group Inc. Price, Consensus and EPS Surprise

CME Group Inc. Price, Consensus and EPS Surprise

CME Group Inc. price-consensus-eps-surprise-chart | CME Group Inc. Quote

Financial Update

As of Sep 30, 2020, CME Group had $1.4 billion of cash and marketable securities, down 12.9% from 2019 end. As of Sep 30, 2019, long-term debt of $3.4 billion decreased 8% from 2018 end.

As of Sep 30, 2020, the company had total assets worth $125.8 billion, up 67.2% from 2019 end.

Capital Deployment

CME Group paid out $304 million in dividends in the third quarter.  The company has returned about $14.1 billion to shareholders in the form of dividends since the implementation of the variable dividend policy in early 2012.

Zacks Rank

CME Group currently carries a Zacks Rank #4 (Sell).  

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Securities Exchange Industry Players

Third-quarter earnings of MarketAxess Holdings MKTX and Nasdaq NDAQ beat the Zacks Consensus Estimate.

Upcoming Release

Intercontinental Exchange ICE is slated to report its third-quarter results on Oct 29 before market open. The Zacks Consensus Estimate for earnings is pegged at 99 cents per share.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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