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Why Is CME (CME) Up 5.1% Since Last Earnings Report?
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A month has gone by since the last earnings report for CME Group (CME - Free Report) . Shares have added about 5.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is CME due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
CME Group Q2 Earnings Top on Record Trading Volume
CME Group reported second-quarter 2024 adjusted earnings per share of $2.56, which beat the Zacks Consensus Estimate by 2%. The bottom line increased 11.3% year over year. Quarterly results benefited from a record in trading volumes. Average daily volume increased in its six asset classes with average daily volume (ADV) up 16% in commodities and 13% in financial markets.
Performance in Detail
CME Group’s revenues of $1.5 billion increased 12.5% year over year. The year-over-year increase was primarily due to higher clearing and transaction fees (up 11.8% year over year), market data and information services (up 7.3% year over year) and other (36.8% year over year). The top line beat the Zacks Consensus Estimate by almost 1%.
Total expenses inched up 2% year over year to $531.9 million, attributable to higher technology, and licensing and other fee agreements. It exceeded our estimate of $552.4 million.
Operating income increased 20% from the prior-year quarter to $1 billion. Our estimate was $961.8 million.
ADV was 25.9 million contracts, including non-U.S. ADV, which reached a record 7.8 million contracts. The total average rate per contract was 70.8 cents.
Financial Update
As of Jun 30, 2024, CME Group had $2 billion of cash and marketable securities, down 48.5% from the 2023-end level. As of Jun 30, 2024, long-term debt was $2.7 billion, down 21.7% from 2023-end. As of Jun 30, 2024, CME had shareholders' equity worth $27.6 billion, up 3.4% from the end of 2023.
Capital Deployment
CME Group paid out $419 billion in dividends, taking the payout to $25.2 billion since the implementation of the variable dividend policy in early 2012.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
At this time, CME has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, CME has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is CME (CME) Up 5.1% Since Last Earnings Report?
A month has gone by since the last earnings report for CME Group (CME - Free Report) . Shares have added about 5.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is CME due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
CME Group Q2 Earnings Top on Record Trading Volume
CME Group reported second-quarter 2024 adjusted earnings per share of $2.56, which beat the Zacks Consensus Estimate by 2%. The bottom line increased 11.3% year over year. Quarterly results benefited from a record in trading volumes. Average daily volume increased in its six asset classes with average daily volume (ADV) up 16% in commodities and 13% in financial markets.
Performance in Detail
CME Group’s revenues of $1.5 billion increased 12.5% year over year. The year-over-year increase was primarily due to higher clearing and transaction fees (up 11.8% year over year), market data and information services (up 7.3% year over year) and other (36.8% year over year). The top line beat the Zacks Consensus Estimate by almost 1%.
Total expenses inched up 2% year over year to $531.9 million, attributable to higher technology, and licensing and other fee agreements. It exceeded our estimate of $552.4 million.
Operating income increased 20% from the prior-year quarter to $1 billion. Our estimate was $961.8 million.
ADV was 25.9 million contracts, including non-U.S. ADV, which reached a record 7.8 million contracts. The total average rate per contract was 70.8 cents.
Financial Update
As of Jun 30, 2024, CME Group had $2 billion of cash and marketable securities, down 48.5% from the 2023-end level. As of Jun 30, 2024, long-term debt was $2.7 billion, down 21.7% from 2023-end. As of Jun 30, 2024, CME had shareholders' equity worth $27.6 billion, up 3.4% from the end of 2023.
Capital Deployment
CME Group paid out $419 billion in dividends, taking the payout to $25.2 billion since the implementation of the variable dividend policy in early 2012.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
At this time, CME has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, CME has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.