CME Group Discloses Strong Financial Results in 2016

The group’s solid fourth quarter financial performance was driven by the highest quarterly average daily volume to date.

Chicago-based CME Group (NASDAQ: CME), one of the world’s paramount exchange operators, has published its financial results for the full year and fourth quarter of 2016, which were largely better when weighed against its 2015 equivalent, according to a CME statement.

The Q4 financial release follows on the heels of last month’s volumes report that showed a healthy gain in January 2017 across key business segments. However, this was offset when weighed against its January 2016 counterpart, with FX, equities, and futures all performing worse over this timeframe.

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For Q4 2016, CME Group revealed that revenues pointed higher compared to a year earlier, coming in at $913 million, up 12 percent from $814 million in the Q4 2015. In addition, CME saw a period of strong revenues in 2016 overall, which were fueled by advances in yields across a number of its business segments, coming in at $3.6 billion, a gain of 9 percent year-on-year from $3.3 billion reported back in 2015.

The same narrative was noted across CME’s total operating income for Q4 2016, having yielded a profit of $540 million – this represents a jump of 15 percent year-on-year from $469 million in 2015. Another area of strength for the quarter was the group’s diluted earnings per share (EPS), which orchestrated a rise up to $1.10 in Q4 2016, up 28 percent year-on-year from $0.86 in the same period a year earlier.

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Net income for 2016 was also up year-on-year by a factor of 23.3 percent after recording $1.53 billion compared to $1.24 billion in 2015. Operating expenses also witnessed an uptick, jumping to $372 million in Q4 2016 or up 8.4 percent year-on-year from $343 million in the year prior.

Overall volumes solid year-on-year

The group’s solid fourth quarter financial performance was driven by the highest quarterly average daily volume to date, including record volumes in energy, and overall options and electronic options trading.

CME has notched growth across most of its six product lines in 2016. The standout performance showed the highest ever average daily volume of 15.6 million contracts during 2016, which correlates to a gain of 12 percent year-on-year from 13.963 million contracts in November 2015. Across a quarterly timeframe, Q4 2016’s figure of 16.325 million showed a more upbeat picture, an increase of 24 percent from 13.178 million contracts in 2015.

Commenting in a recent statement on the financial metrics, CME Group Chairman and Chief Executive Officer Terry Duffy said: “Our diverse risk management products and services continue to increase in demand, especially given the unpredictable nature of ongoing geopolitical changes, and our trading volume for the fourth quarter and full-year 2016 increased more than 12 percent, driving double-digit earnings growth over both periods.”

“Looking ahead, the opportunity to provide solutions to our global clients has never been greater, and the fact our open interest exceeded 120 million contracts for the first time ever during the fourth quarter shows how engaged they are in our markets.  Further, by driving volume growth and remaining very focused on expense discipline, we were able to declare $1.9 billion of dividends for our shareholders during 2016,” he added.

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