CME Group Beats Q1 Estimates despite 25% Profit Drop

The company reported a net profit of $574.4 million for the quarter.

US derivatives giant, CME Group (NASDAQ: CME) published its financials for the first quarter of 2021, reporting revenue of $1.25 billion and operating income of $725 million.

The revenue saw a yearly drop of almost 18 percent from Q1 of 2020 with $1.52 billion. Operating income also slumped by 24 percent.

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Beats Streat Estimations

Net income of the exchange operator dropped by 25 percent quarter-over-quarter with $574.4 million or $1.60 per share. This figure was at $766.2 million or $2.14 per share in the same quarter a year before. On an adjusted basis, it earned $1.79 per share, while analysts were expecting only $1.75 per share, according to Refinitiv data.

It is to be noted that the first market witnessed one of the major turmoil in the first quarter of last year due to the economic impact of Coronavirus that significantly increased the trading demand.

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CME Group is one of the largest derivatives exchange operators in the United States. The exchange recorded an average daily volume (ADV) of 21.8 million contracts in the first quarter of the year, along with a non-US ADV of 6.1 million contracts.

Further, the company detailed that it generated $1 billion from clearing and transaction fees in the quarter. Traders paid a total average rate of $0.658 per contract. Moreover, CME generated a revenue of $144 million from its market data business.

Commenting on the financials, Terry Duffy, Chairman and CEO at CME Group, said: “Since the start of 2021, we have experienced strong demand for our products as clients looked to manage risks associated with the potential for a post-pandemic economic recovery. Trading volumes in Q1 have returned to pre-pandemic levels, with ADV in the first quarter representing our third-highest quarterly ADV ever, and open interest climbing above 100 million contracts.”

“Additionally, we continue to deliver against our growth objectives, introducing several innovative, new products, completing migration of BrokerTec to CME Globex and agreeing to form a joint venture for post-trade services in OTC markets.”

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