CME Group (CME) to Report Q2 Earnings: What's in Store?

CME Group CME is slated to report second-quarter 2020 results on Jul 29, before market opens. The company delivered negative earnings surprise of 1.3% in the last reported quarter.

Let’s see how things have shaped up for this announcement.

Factors to Consider

CME Group’s second-quarter results are likely to reflect its strong market position and varied derivative product lines. Non-transaction related opportunities, OTC offerings and its options business are likely to have contributed to top-line growth.

The company boasts a premier position with about 90% market share of the global futures trading and clearing services. However, given the impact of the pandemic, the Zacks Consensus Estimate for clearing and transaction fees is pegged at $953 million, indicating a decrease of 9.4% from the year-ago reported figure.

In second-quarter 2020, average daily volumes (ADV) decreased 16% year over year to 17.6 million contracts per day. Energy volume of 2.6 million contracts increased 4% from second-quarter 2019. Interest rate volume of 6.9 million contracts per day decreased 41% while Equity index volume of 5.6 million contracts per day increased 60%. However, Metals volume of 0.5 million contracts per day decreased 18%. Foreign exchange volumes dropped 17% to 0.7 million contracts per day. Agricultural volume of 1.3 million contracts per day decreased 29% from second-quarter 2019.

Higher compensation and benefits, technology expenses, professional fees and outside services, licensing and other fee agreements are likely to have increased expenses in the second quarter.

The Zacks Consensus Estimate for earnings per share is pegged at $1.62, indicating a decrease of nearly 8% from the year-ago quarter reported figure. The Zacks Consensus Estimate for revenues stands at $1.2 billion, indicating a downside of 6.1% from the year-ago quarter reported figure.

CME Group Inc. Price and EPS Surprise

CME Group Inc. Price and EPS Surprise

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

What the Zacks Model Says

Our proven model does not conclusively predict an earnings beat for CME Group this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case as you can see below.

Earnings ESP: CME Group has an Earnings ESP of 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $1.62. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

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

Stocks to Consider

Some insurance stocks with the right combination of elements to come up with an earnings beat this time around are:

American Financial Group AFG has an Earnings ESP of +21.45% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cboe Global Markets CBOE has an Earnings ESP of +0.48% and a Zacks Rank #3.

Allstate Corporation ALL has an Earnings ESP of +11.10% and a Zacks Rank of 3.

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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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