CME Group Inc. Reports Strong Second-Quarter 2016 Financial Results
CME Group Inc. (NASDAQ: CME) today reported revenue of $906 million and operating income of $563 million for the second quarter of 2016. Net income was $320 million and diluted earnings per share were $0.95. On an adjusted basis, net income would have been $387 million and diluted earnings per share would have been $1.14. Financial results presented on an adjusted basis for the second quarter of 2016 and 2015 exclude certain items, which are detailed in the reconciliation of non-GAAP results.1
“Our second-quarter results reflect steady and balanced growth across our diverse set of products, with four of our six product lines delivering more than 20 percent year-over-year increases in volume and transaction fee revenue,”
said CME Group Executive Chairman and President Terry Duffy.
“Total revenue growth of 11 percent, combined with strong expense management, allowed us to further improve margins and expand adjusted earnings per share by 15 percent. Total open interest reached an all-time high of more than 116 million contracts on June 9, demonstrating how market participants increasingly rely on CME Group to meet their risk management needs.”
“Working in collaboration with customers and intermediaries, we continue to deliver innovative products and services in all of our business lines,” said CME Group Chief Executive Officer Phupinder Gill.
“As a result, many of our offerings have outperformed comparable products traded elsewhere. During the second quarter, we became the first exchange to offer swaptions clearing. It followed the highly successful launch of our Ultra 10-Year Treasury futures in the first quarter. Last week, we announced the launch of S&P 500 Total Return Index futures. This comes in advance of the uncleared swap margin rules scheduled to go into effect on September 1, which we view as a catalyst for developing more specialized products going forward – particularly in our interest rate, foreign exchange and equity lines.”
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 and earnings presentation materials.
Second-quarter 2016 average daily volume was 15.1 million contracts, up 13 percent from second-quarter 2015, and included a quarterly record for agricultural commodities. Clearing and transaction fee revenue was $768 million, up 13 percent compared with second-quarter 2015. Second-quarter 2016 total average rate per contract was 78.2 cents, up from 75.6 cents in first-quarter 2016, driven primarily by a sequential product mix shift with an increased proportion of the volume from commodity contracts which capture higher fees.
Market data revenue was $103 million, up slightly compared with the second quarter last year.
As of June 30, 2016, the company had $1.2 billion of cash and marketable securities and $2.2 billion of long-term debt. The company paid the regular second-quarter dividend of approximately $202 million at the end of June, bringing the amount paid in dividends to shareholders to date in 2016 to $1.4 billion. The company has returned more than $6 billion to shareholders in the form of dividends since the implementation of the variable dividend policy in early 2012.
Source: CME Group Inc.
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