01—Abstract
Summary
Summary of the 10-Q filed May 8, 2013. Cited figures are marked; the original filing is the authoritative source.
CME Group Inc. reported its first quarter 2013 results, showing a decrease in total revenues by 7% to $718.6 milliona compared to the prior year quarter, primarily driven by lower market data and information services revenue and a reduction in clearing and transaction fees due to a lower average rate per contract.
Despite the revenue decline, operating expenses were also reduced by 3% to $313.1 millionb, largely due to the contribution of certain Dow Jones Index assets and the sale of Credit Market Analysis Ltd. Net income attributable to CME Group decreased by 12% to $235.8 million, leading to diluted earnings per share of $0.71, down from $0.80 in the first quarter of 2012. The company maintained a strong liquidity position with $1.84 billion in cash and cash equivalents. Management highlighted a stable operating margin of 56.4% and reiterated confidence in maintaining an investment grade rating.
02—Key points
Key Highlights
- Total revenues declined 7% year-over-year to $718.6 million, primarily due to lower market data revenue and reduced clearing and transaction fees.
- Operating expenses decreased by 3% to $313.1 million, aided by the contribution of Dow Jones Index assets and the sale of CMA.
- Net income attributable to CME Group fell 12% to $235.8 million, resulting in diluted EPS of $0.71, down from $0.80 in the prior year.
- Contract volume saw a slight decrease of 2%, while average daily volume increased by 2% due to fewer trading days in the current quarter.
- Interest rate products volume was flat, with increases in long-term rates offset by declines in short-term rates.
- Equity and foreign exchange product volumes showed increases, driven by improved macroeconomic conditions and currency volatility respectively.
- The company maintained a solid liquidity position with $1.84 billion in cash and cash equivalents at the end of the quarter.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2013filed May 8, 2013Financial Statements
Q1 FY2013 against Q1 FY2012
| Line item | Q1 FY2013Q1 FY2012 | Change |
|---|---|---|
| Revenue | $718.60M$774.60M | −7.2% |
| Operating Expenses | $313.10M$323.40M | −3.2% |
| Operating Income | $405.50M$451.20M | −10.1% |
| Net Income | $235.80M$266.60M | −11.6% |
| EPS (Basic) | $0.71$0.81 | −12.3% |
| EPS (Diluted) | $0.71$0.80 | −11.3% |
| Shares Outstanding (Basic) | 331.95M330.81M | +0.3% |
| Shares Outstanding (Diluted) | 333.37M331.85M | +0.5% |
05—Questions
Frequently Asked Questions
What were the primary drivers of the revenue decline in Q1 2013?
The primary drivers of the revenue decline were a decrease in market data and information services revenue, largely due to the contribution of certain Dow Jones Index assets and the sale of Credit Market Analysis Ltd., and a decrease in clearing and transaction fees resulting from a lower average rate per contract.
How did the company manage its expenses in Q1 2013?
Operating expenses were reduced by 3% compared to the prior year quarter. This reduction was primarily due to cost savings realized from the contribution of the Dow Jones Index asset group and the sale of Credit Market Analysis Ltd.
What is the company's liquidity position as of March 31, 2013?
CME Group maintained a strong liquidity position with $1.84 billion in cash and cash equivalents at the end of the first quarter of 2013, an increase from $1.60 billion at the end of the prior year. The company also has significant borrowing capacity available.
What was the trend in contract volume and average rate per contract?
Total contract volume decreased by 2% year-over-year, while average daily volume increased by 2% due to having two fewer trading days in the first quarter of 2013. The average rate per contract decreased by 3%, influenced by a shift in product mix towards lower-fee equity and foreign exchange products and increased incentives on energy contracts.
06—Continue