CME Group Reports Strong Fourth-Quarter 2015

CME Group Inc. (NASDAQ: CME) today reported revenue of $814 million and operating income of $470 million for the fourth quarter of 2015. Net income was $292 million and diluted earnings per share were $0.86. Adjusted for non-recurring items, net income would have been $311 million and diluted earnings per share would have been $0.921.
Total revenue for full-year 2015 was $3.3 billion and operating income was $2.0 billion. Net income was $1.25 billion and diluted earnings per share were $3.69. Adjusted for non-recurring items, 7 percent year-over-year growth in revenue coupled with operating expenses down 1 percent drove net income of $1.3 billion, up 15 percent compared with 2014, and diluted earnings per share of $3.861, up 14 percent.
“In 2015, we reached record levels of volume and revenue as we enabled our increasing number of customers around the world to manage risk,” said CME Group Executive Chairman and President Terry Duffy.

“We saw year-over-year revenue growth in five of our six product lines, with particular strength in energy and agricultural products as well as our overall options business. Continuing this momentum, we had record monthly volume in January 2016, with more than 18 million contracts per day traded, up 16 percent. Given the underlying strength of our business, we announced a 20 percent increase in our next regular quarterly dividend to 60 cents per share. In each of the prior four years, our total dividend yield has exceeded five percent.”

“We were pleased to deliver an increase of 7 percent in revenue and 15 percent in adjusted net income during 2015, a year that many considered a challenging environment for financial services companies,” said CME Group Chief Executive Officer Phupinder Gill. “We were very active during 2015 in terms of new product innovation and expanding our global partnerships, including securing the long-term rights to the FTSE Russell indexes. Looking at new products, one standout within our interest rate franchise is our recently launched Ultra 10-year treasury product, which has been the most successful start of a new contract in our long history. During the year, we increased our operating margin by reducing costs from the prior year, driving efficiency and improving our agility in serving customers globally.”
1. A reconciliation of the non-GAAP financial results mentioned to the respective GAAP figures can be found within the Reconciliation of GAAP to non-GAAP Measures chart at the end of the financial statements.
Fourth-quarter 2015 average daily volume was 13.2 million contracts, down 11 percent from fourth-quarter 2014. Clearing and transaction fee revenue were $679 million, down 5 percent compared with fourth-quarter 2014. Fourth-quarter 2015 total average rate per contract was 78.9 cents, up from 75.9 cents in third-quarter 2015, driven primarily by an increased proportion of the volume from higher paying non-members during the quarter, as well as strong energy volume. Market data revenue was $99 million, up 11 percent compared with the fourth quarter last year.
Full-year 2015 record average daily volume was 14.0 million contracts, up 2 percent from 2014, and included annual records for energy, agricultural commodities, total options and electronic options. Clearing and transaction fee revenue was $2.8 billion, up 6 percent compared with 2014. The end of the year rate per contract in 2015 was $0.769, up 4 percent from $0.743 at the end of 2014. Market data revenue was $399 million, up 12 percent compared with the prior year.
As of December 31, 2015, the company had $1.8 billion of cash and marketable securities and $2.2 billion of long-term debt. The company declared dividends during 2015 of $1.6 billion, including the annual variable dividend for 2015 of $977 million, which was paid in January 2016. The company has returned more than $5.6 billion to shareholders in the form of dividends since the implementation of the variable dividend policy in early 2012.
Source: CME Group
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