Chicago-based operator of commodity futures marketplaces, CME Group, with some of the biggest commodities exchanges across the globe, including the Chicago Mercantile Exchange (CME) under its subsidiaries, reported today its consolidated financial results for the fourth-quarter (Q1) of 2014. The group’s report reflects a positive turnaround after two quarters of continued decreases in revenues and earnings for the CME.
The CME reported revenues of $777 million and an operating income of $454 million for the first-quarter of 2014. Net income attributable to CME Group was $267 million and diluted earnings per share was $0.79. Excluding the items noted in the reconciliation, adjusted earnings per share would have been $0.83.
On a quarter to quarter basis, today’s figures reveal a 13.1% rise in revenues, 40.5% increase in operating income and a 38.4% rise in net income from Q4 2013. Additionally, diluted earnings per share increased by 36.2% and excluding items noted in the reconciliation, adjusted earnings per share went up by 29.7%.
In the previous quarter the CME reported revenues of $687 million and operating income of $323 million for the fourth quarter of 2013. Net income attributable to CME Group was $193 million and diluted earnings per share was $0.58. Excluding the items noted in the reconciliation, adjusted earnings per share would have been $0.64.
“In first-quarter 2014, we posted industry-leading volume growth of 9 percent, driven by our interest rate, equity index and agricultural products,” said CME Group Executive Chairman and President Terry Duffy. “Following Federal Reserve comments related to quantitative easing and the target federal funds rate, our Eurodollar futures reached a daily record of 6 million contracts traded on March 19. Further, market participants have begun to adjust their risk management activities in the short end of the interest rate curve, as evidenced by our 47 percent growth in Eurodollar volume in the first quarter followed by 73 percent growth in April.”
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“In 2014, we continue to meet the needs of our customers by delivering innovative new products and services,” said CME Group Chief Executive Officer Phupinder Gill. “We recently launched our London-based derivatives exchange, CME Europe, allowing our European clients to manage risk and access liquidity in their local jurisdiction. With London as the center of global FX trading, we will focus on FX futures initially, and add other products going forward. We also launched a Euro-denominated deliverable swap futures product, and plan to launch a North American physically delivered aluminum futures contract in second-quarter 2014.”
First-quarter 2014 average daily volume was 13.7 million contracts, up 9 percent from first-quarter 2013, and included a 19 percent growth in interest rate volume. Clearing and transaction fee revenues were $652 million, up 10 percent compared with the same period last year. First-quarter total average rate per contract was 76.7 cents, down from 78.0 cents in fourth quarter 2013, driven primarily by a higher proportion of total volume coming from interest rate products, which have lower average fees.
As of March 31, 2014, the company has $1.1 billion of cash and marketable securities and $2.1 billion of debt after paying off $750 million of debt in February.