It has been a rough quarter for financial stocks as another, CME Group (NASDAQ: CME), reported a drop in earnings in the third quarter today.
CME Group, which owns various derivatives exchanges, saw earnings drop 34% year over year to $411.7 million, or $1.15 per share.
Revenue fell roughly 15% to $1.1 billion year over year. The company, which makes most of its money on clearing and transaction fees, reported a big drop in that category as fees declined 19.7% to $835 million, versus the third quarter of 2019. Those losses were offset somewhat by a 7% increase year over year in market data and information services revenue to $139 million.
Image source: Getty Images.
The fees were down because average daily volume (ADV) was down. The ADV, which is the average number of shares traded in a day for any given stock, was 15.6 million contracts. That was down from 17.6 million in the second quarter and 20.2 million in the third quarter of 2019.
The volumes among interest rate products took the biggest hit, dropping to 5.3 million from 10.8 million in the third quarter of 2019. Energy was also down with ADV of 1.8 million, from 2.4 million year over year. But trading in equity index products was up to 5.4 million from 3.9 million year over year, while agricultural commodities and metals were up slightly.
"Despite the many challenges created by the ongoing pandemic, our metals, equities, agriculture and data services businesses showed strong performance during the third quarter," CEO Terry Duffy said.
Duffy said that despite the "extreme uncertainty," CME Group continued to innovate with the launch of several new products in the quarter, including Micro E-mini options and Nasdaq Veles California Water Index futures.
The stock price was down about 6% in early trading on Wednesday.
10 stocks we like better than CME Group
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and CME Group wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of October 20, 2020
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.