The Trends To Watch In CME’s Q1 Earnings
After a decent performance through 2017, we expect CME Group (NASDAQ:CME) to announce strong Q1 earnings when it reports on April 26. CME’s Q1 daily volumes came in 29% above the prior year levels. Since transaction fees account for over 85% of CME’s revenue, a strong growth in quarterly volumes is likely to drive the company’s top line. Our interactive dashboard shows our expectations for the company’s earnings; you can modify the key value drivers to see how they impact the company’s results.
The Fed’s rate hikes, and the expectation of further rate hikes, led to a strong rise in interest rate derivative volumes (+31% y-o-y). Energy derivatives maintained solid volumes, amid a surge in oil prices due to discussions around cuts in production. The continuous movements in gold and silver prices – due to the strengthening U.S. dollar and other economic and political factors in the U.S. – have continued to boost metals derivative volumes. Equities saw a major jump, largely due to a more volatile and favorable trading period in comparison to last year. After remaining subdued for most of the previous year, agricultural commodities volumes increased with the hurricanes striking coastal regions.
CME remains bullish on its market data and information services segment, with new products in the pipeline with enhanced business intelligence and machine learning capabilities. We expect that customers will continue to use these services even as the company increasingly charges for them. This should help boost its top line going forward.
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