CME Group (CME) Q3 Earnings Beat Estimates, Revenues Rise Y/Y
CME Group CME reported third-quarter 2023 record adjusted earnings per share of $2.25, which beat the Zacks Consensus Estimate by 1.8%. The bottom line increased 13.6% year over year. The quarter reflects the ninth straight quarter of double-digit growth.
Quarterly results benefited from an increase in trading volumes. Average daily volume increased in two of its six asset classes.
CME Group Inc. Price, Consensus and EPS Surprise
CME Group Inc. price-consensus-eps-surprise-chart | CME Group Inc. Quote
Performance in Detail
CME Group’s revenues of $1.3 billion increased 9% year over year. The year-over-year increase was primarily due to higher clearing and transaction fees (up 8.7% year over year) and market data and information services (up 8.6% year over year). Revenues beat the Zacks Consensus Estimate by 0.01%.
Total expenses increased 5.8% year over year to $517.6 million, attributable to higher technology, compensation and benefits, amortization of purchased intangibles and other expenses. Our estimate was $549.5 million.
Operating income increased 11% from the prior-year quarter to $820.2 million and beat our estimate of $750.5 million.
Average daily volume (ADV) was 22.3 million contracts. Non-U.S. ADV reached 6.5 million contracts, up 7% year over year, including 16% growth in interest rates and double-digit growth across agricultural, energy and metals products.
Financial Update
As of Sep 30, 2023, CME Group had $2.4 billion of cash and marketable securities, down 14.1% from 2022 end. As of Sep 30, 2023, long-term debt was $3.4 billion, down 0.02% from 2022 end.
As of Sep 30, 2023, CME had total equity worth $28.2 billion, up 4.7% from 2022 end.
Capital Deployment
CME Group paid out $400 billion in dividends, taking the payout to $22 billion since the implementation of the variable dividend policy in early 2012.
Zacks Rank
CME currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Securities and Exchanges
Nasdaq NDAQ reported third-quarter 2023 adjusted earnings per share of 71 cents, beating the Zacks Consensus Estimate of 67 cents. The bottom line improved 4% year over year. The improvement was mainly driven by organic growth and solid results in the Solutions segment. Revenues of $940 million increased 6% year over year and beat the Zacks Consensus Estimate of $929 million.
Operating margin of 52% contracted 100 basis points year over year. The Nasdaq stock market welcomed 87 new company listings in the third quarter of 2023, including 39 initial public offerings.
Nasdaq expects 2023 non-GAAP operating expenses in the range of $1.785 billion to $1.805 billion.
MarketAxess Holdings Inc. MKTX reported third-quarter 2023 earnings per share of $1.46, which missed the Zacks Consensus Estimate by 2%. Moreover, the bottom line, declined from $1.58 per share a year ago. Total revenues increased 0.1% year over year to $172.3 million in the quarter under review. However, the top line missed the consensus mark by 0.6%.
MarketAxess reported an operating income of $66.9 million, which decreased 12.3% year over year in the third quarter. MarketAxess’ high-grade trading volume declined 0.5% year over year to $326.3 billion, missing our estimate by 11.3%. ADV of the same product category rose 1.1% year over year to $5,179 million, but missed our estimate by 10.2%.
Management revised expense guidance upward to be between $432 million and $438 million for this year, the mid-point of which indicates a 11.1% increase from the 2022 reported figure.
Upcoming Release
Cboe Global Markets CBOE is slated to release third-quarter 2023 earnings on Nov 3. The Zacks Consensus Estimate for the third quarter is pegged at $1.84 per share, indicating an increase of 5.6% from the year-ago reported figure.
CBOE Group delivered an earnings surprise in the last four reported quarters while missing in one.
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