CME Group's 2Q profit rose, beating expectations

CME Group Inc. said today its second-quarter profit jumped 10 percent due to the company's expanding operations. The exchange operator's profit beat analysts' expectations. The company's second-quarter results include operations at the New York Mercantile Exchange, which were not included in the year-ago figures. CME Group acquired the New York Mercantile Exchange during the third quarter of 2008. Net income for the quarter ended June 30, rose to $222 million, or $3.33 per share, from $201 million, or $3.67 per share, during the same quarter last year. Earnings per share declined despite an increase in profit because CME Group had more shares outstanding during the most recent quarter. When the New York Mercantile Exchange's results are included in the year-ago figures, CME Group and the New York Mercantile Exchange's combined profits actually fell 15 percent from the year-ago period. Analysts polled by Thomson Reuters, on average, forecast earnings of $3.23 per share for the quarter on revenue of $651.5 million. CME Group's revenue increased 15 percent, but still fell short of expectations. Revenue totaled $648 million during the second quarter, compared with $563 million during the year-ago period. Revenue increased primarily due to growth in clearing and transaction fees as the company operated more exchanges during the most recent quarter. CME Group's clearing and transaction fee revenue increased 17 percent to $536.8 million during the second quarter, from $458.5 million during the same quarter in 2008. Factoring in the New York Mercantile Exchange's results from the year-ago period, revenue declined 14 percent amid slowing trading volume. CME average daily trading volume fell 21 percent to about 8.8 million trades per day during the second quarter. New York Mercantile Exchange volume dipped 8 percent to about 1.7 million trades per day. Despite the year-over-year decline in trading, CME Group said it started to see a recovery in trading at the end of the second quarter as markets have begun to strengthen. "As the economy showed signs of stability, we saw increased volumes in June, particularly in interest rates, foreign exchange and agricultural markets," Terry Duffy, CME Group's executive chairman, said in a statement. Shares of CME Group rose $1.05 to $273.09 in premarket trading Thursday. Shares closed Wednesday at $272.70.