Exchange operator CME's profit beats estimates on record trading volumes
Recasts paragraph 1, adds shares in last paragraph, adds CEO comments in paragraphs 3-4, background
By Jaiveer Shekhawat
July 24 (Reuters) -CME Group CME.O on Wednesday beat analyst estimates for its second-quarter profit, as the exchange operator notched record trading volumes, with investors rushing to manage risks in the wake of ongoing geopolitical and economic uncertainties.
Latest economic data showing signs of easing inflation has fueled hopes of a possible rate cut in the current half of the year that has helped markets reach new highs.
"Looking at the uncertainty around the U.S. political landscape, with the disparity of opinions and policies, the need to mitigate and manage risk has never been more paramount," Chairman and Chief Executive Officer Terry Duffy said in an analyst call.
"On top of that, the ongoing uncertainty in the Middle East coupled with the unrest between Russia and Ukraine are continuing issues with no end in sight that market's definitely need to manage. These are just a few of the geopolitical events that highlight the need for our risk management products."
Market volatility helped increase CME's average daily volume (ADV) in the quarter as customers used its offerings to manage risks. The exchange had its best-ever second-quarter ADV.
ADV grew 13.5% year over year to 25.9 million contracts per day.
Clearing and transaction fees, from which CME makes the most of its revenue, was up nearly 12% at $1.25 billion. Its total revenue rose nearly 13% to $1.53 billion.
On an adjusted basis, the exchange operator recorded a profit of $2.56 per share for the quarter. Analysts on average had expected a profit of $2.53 per share, according to LSEG data.
Shares of the company rose 1% in early hours of trading.
Reporting by Jaiveer Singh Shekhawat in Bengaluru; Editing by Maju Samuel
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
