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CME Group (CME) Q1 Earnings Beat, Revenues Miss Estimates

CME Group Inc. CME reported first-quarter 2021 adjusted earnings per share of $1.79, which beat the Zacks Consensus Estimate of $1.75. The bottom line decreased 23.2% year over year due to lower clearing and transaction fees and market data and information services. Average daily volume decreased in all the six products lines.

First-quarter average daily volume marked the third-highest quarterly figure.

CME Group Inc. Price, Consensus and EPS Surprise

Performance in Detail

CME Group’s revenues of $1.3 billion decreased 17.7% year over year. The year-over-year decrease was primarily due to lower clearing and transaction fees (down 21.3% year over year) and market data and information services (down 9.7% year over year). The top line missed the Zacks Consensus Estimate by 1%.

Total expenses decreased 6% year over year to $528.2 million during the reported quarter, attributable to lower professional fees and outside services and licensing and other fee agreements.

Operating income decreased 24.5% from the prior-year quarter to $725.1 million.

Average daily volume decreased 19.2% year over year to 21.8 million contracts in the quarter. Average rate per contract decreased 2.7%.

Financial Update

As of Mar 31, 2021, CME Group had $1.041.6 billion of cash and marketable securities, down 39.9% from 2020 end. As of Mar 31, 2021, long-term debt of $3.4 billion remained flat with 2020 end.

As of Mar 31, 2021, the company had total equity worth $26.6 billion, up 0.8% from 2020 end.

Capital Deployment

The company paid out dividends of $1.2 billion in the first quarter, including the annual variable dividend for 2020 of $895 million. CME Group has returned more than $15.6 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 #3 (Hold).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Securities Exchange Industry Players

First-quarter earnings of Nasdaq NDAQ beat the Zacks Consensus Estimate while that of MarketAxess Holdings MKTX missed the same.

Upcoming Release

Intercontinental Exchange Inc. ICE is scheduled to release first-quarter earnings on Apr 29. The Zacks Consensus Estimate for the first quarter is pegged at $1.30.

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