CME Group Inc. (NASDAQ:CME) reported second-quarter 2016 adjusted earnings per share of a record $1.14, which surpassed the Zacks Consensus Estimate of $1.11 by 2.7%. Also, the bottom line improved 15.2% year over year on record average daily volumes.
Including one-time items, net income of 95 cents per share for the quarter increased 21.8% year over year.
The quarter witnessed solid revenue growth, coupled with cost control induced margin expansion and earnings improvement. Management noted four of six product lines that generated more than 20% year-over-year increase in volume and transaction fee revenue.
Behind the Headlines
CME Group’s total revenue grew 10.5% year over year to a record $906.4 million. The improvement was mainly driven by 12.6% higher clearing and transaction fees and 3.7% increase in access and communication fees. Revenues, however, missed the Zacks Consensus Estimate of $911 million.
The company’s average daily volume was a record 15.1 million contracts, up 13% year over year. The company achieved quarterly record in agricultural commodities. In addition, total average rate per contract of 78.2 cents was higher than 77.7 cents in the year-ago quarter.
Total expenses increased 5.6% year over year to $343.1 million during the reported quarter. Operating income jumped 13.8% to $563.3 million.
Financial Update
As of Jun 30, 2016, CME Group had $1.2 billion in cash and marketable securities, down 29.7% from $1.8 billion at year-end 2015. Long-term debt was $2.2 billion, up 0.04% from the 2015-end level.
As of Jun 30, 2016, the company had total assets worth $67.6 billion, up 0.4% from $67.4 billion as of Dec 31, 2015.
Dividend Update
During the quarter, the company paid dividends worth $202 million.
CME GROUP INC Price, Consensus and EPS Surprise
CME GROUP INC Price, Consensus and EPS Surprise | CME GROUP INC Quote
Zacks Rank & Performance of Other Stocks
Currently, CME Group carries a Zacks Rank #3 (Hold). Among the other players from the finance sector that have reported their second-quarter earnings so far, the bottom line at RLI Corp. (NYSE:RLI) and Progressive Corp. (NYSE:PGR) missed their respective Zacks Consensus Estimates, while Nasdaq, Inc.’s (NASDAQ:NDAQ) earnings beat the same.
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