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CME Group (CME) to Report Q4 Earnings: What's in Store?

Zacks Equity Research

CME Group CME is slated to report fourth-quarter 2019 results on Feb 12, before market open.

The Zacks Consensus Estimate for the to-be-reported quarter’s earnings stands at $1.54, implying nearly 13% decline from the year-earlier reported figure.

The company’s earnings surpassed estimates in each of the last four quarters, the average being 2.88%.

Factors at Play

CME Group’s overall performance is likely to have suffered in the quarter under review due to lower revenues. The Zacks Consensus Estimate for revenues is pegged at $1.1 billion, indicating a 7.3% fall from the year-ago reported figure. Clearing and transaction fees of the company might also have reduced. The consensus mark for the same suggests a decrease of 11.2% from the prior-year reported number.

Weak average daily volume is expected to have dented the top line to some extent. The Zacks Consensus Estimate for Average Daily Volume (including Nymex and Comex) hints at a 19% deterioration from the year-ago reported number.

The company might have also borne the brunt of a platform winding up in Italy.

Moreover, expenses are likely to have shot up due to higher compensation and benefits, technology expenses, professional fees and outside services, licensing and other fee agreements plus depreciation and amortization costs.

The company is likely to have benefited from a solid cash flow in the quarter under review.

Consistent capital deployment is expected to have continued in the fourth quarter, aiding bottomline.

What Our Quantitative Model States

Our proven model predicts an earnings beat for CME Group this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive surprise.

Earnings ESP: CME Group has an Earnings ESP of +0.54%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

CME Group Inc. Price and EPS Surprise

CME Group Inc. Price and EPS Surprise

CME Group Inc. price-eps-surprise | CME Group Inc. Quote

Zacks Rank: CME Group carries a Zacks Rank #3.

Q3 Earnings Highlights

CME Group reported third-quarter 2019 adjusted earnings per share of $1.90, beating the Zacks Consensus Estimate by 8.6%. The bottom line also surged 31% year over year. This upside was driven by solid trading volumes.

Other Stocks to Consider

Some other stocks worth considering from the finance sector with the apt combination of elements to also surpass estimates this reporting cycle are as follows:

AXA Equitable Holdings, Inc. EQH is slated to report fourth-quarter earnings on Feb 27. It has a Zacks Rank #2 and an Earnings ESP of +0.18%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Essent Group Ltd. ESNT is set to report fourth-quarter earnings on Feb 14. The company has a Zacks Rank of 2 and an Earnings ESP of +1.26%.

American International Group, Inc. AIG is slated to announce fourth-quarter earnings on Feb 13. The stock has an Earnings ESP of +4.69% and a Zacks Rank of 3.

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CME Group Inc. (CME) : Free Stock Analysis Report
 
American International Group, Inc. (AIG) : Free Stock Analysis Report
 
Essent Group Ltd. (ESNT) : Free Stock Analysis Report
 
AXA Equitable Holdings, Inc. (EQH) : Free Stock Analysis Report
 
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