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CME Group Posts Strong First Quarter Earnings on Record ADV

By Dave Kovaleski – Updated Apr 29, 2020 at 11:18AM

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Profits rise 54% in the period.

CME Group (CME -2.89%) posted strong revenue and earnings gains in the first quarter on record trading and extreme market volatility.

Revenue was up 29% in the quarter over the same period the year before to $1.5 billion for the Chicago-based company, which runs a derivatives exchange where clients trade futures, options, and other assets. Net income jumped 54% to $766 million and earnings per share climbed 54% to $2.14 per share -- beating analysts' estimates. 

"During the quarter, we saw significantly increased levels of client hedging and risk transfer, across all products and time zones," CME Group Chairman and CEO Terry Duffy said. "Though the long-term effects of the pandemic are still unknown, we remain focused on the health and safety of the entire CME Group community, as well as on facilitating risk management for our market participants during these extraordinary times and beyond."

A screen with a digital map of North America on one side and stock market numbers on the other.

Image source: Getty Images

The exchange saw record trading in the quarter as first-quarter average daily volume (ADV) was 27 million contracts -- up 45% from the same quarter last year. ADV in March hit a record 32 million contracts. Equity Index ADV was 6.5 million contracts, a record, up 106% from the first quarter of 2019. Interest rate ADV was 13.8 million, also a record, up 34% from a year ago.

Also, the derivatives market saw record international trading as ADV for non-U.S. contracts was 7.2 million -- up 57%. That breaks down to 54% growth in Europe, 73% growth in Asia, and 21% growth in Latin America.

Revenue from clearing and transaction fees was up 34% to $1.3 billion. Market data and information services revenue was up slightly to $131 million from $130 million.

Finally, the company reported $1 billion in cash and $3.5 billion in debt as of March 31.

Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends CME Group. The Motley Fool has a disclosure policy.

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