Yahoo Finance CME (CME) Down 0.2% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for CME Group (CME). Shares have lost about 0.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is CME due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
CME Group Q1 Earnings Top Estimates, Revenues Rise Y/Y
CME Group Inc. reported first-quarter 2024 adjusted earnings per share of $2.50, which beat the Zacks Consensus Estimate by 2.4%. The bottom line increased 3.3% year over year.
Quarterly results benefited from an increase in trading volumes. Average daily volume increased in four of its six asset classes.
Performance in Detail
CME Group’s revenues of $1.5 billion increased 3.2% year over year. The year-over-year increase was primarily due to higher clearing and transaction fees (up 0.7% year over year), market data and information services (up 5.8% year over year) and other (37% year over year). The top line beat the Zacks Consensus Estimate by 0.8%.
Total expenses inched up 0.07% year over year to $528.3 million, attributable to higher technology, compensation and benefits, as well as licensing and other fee agreements. It exceeded our estimate of $468.1 million.
Operating income increased 5% from the prior-year quarter to $959.6 million but missed our estimate of $995.2 million. Average daily volume (ADV) was 26.4 million contracts, which decreased 1.9% year over year. Non-U.S. ADV reached 7.4 million contracts. The total average rate per contract was 69.5 cents.
Financial Update
As of Mar 31, 2024, CME Group had $1.5 billion of cash and marketable securities, down 48.5% from the 2023-end level. As of Mar 31, 2024, long-term debt was $2.6 billion, down 21.8% from 2023-end. As of Mar 31, 2024, CME had shareholders' equity worth $27.1 billion, up 1.5% from the end of 2023.
Capital Deployment
CME Group paid out $2.3 billion in dividends, taking the payout to $24.8 billion since the implementation of the variable dividend policy in early 2012.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
Currently, CME has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, CME has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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CME Group Inc. (CME) : Free Stock Analysis Report
