CME Group Inc (NASDAQ:CME) has reported revenues of $841 million and operating income of $472 million for the fourth quarter of 2014. Net income attributable to CME Group was $306 million and diluted earnings per share were $0.91. Excluding the items noted in the reconciliation, adjusted earnings per share would have been $0.951.
The final quarter of 2014 represented a time at which trading activity among many firms across the industry gained momentum, with market volatility having increased dramatically in September, putting an end to almost a year of industry-wide stagnant volumes.
The resultant increase in volumes is reflected in CME Group’s high performance in the fourth quarter of 2014, propelling the venue’s results to the elevated position of being the second highest quarterly revenue ever having been recorded.
A point of interest is that whereas many firms across the retail and institutional sector, offering an OTC or exchange-traded FX facility, experienced a tailing off of volumes during the final months of the year, with September, and October’s high volumes accounting for the majority of the recoveries from the doldrums reported by most companies.
For CME Group, however, the volumes remained steady after September’s spike, and then instead of tailing off as the year drew to a close as with many other firms, CME Group’s FX volume increased marginally to end the year on a positive note.
As 2014 gave way to 2015, CME Group began the new year with confidence, increasing its dividend for the first quarter of the year by 6%, and completing January 2015 with a 4% increase in the average number of FX contracts traded per day compared with December’s volumes.
“During the fourth quarter, we saw a pickup in volatility that helped drive broad-based growth across all our major product offerings,” said CME Group Executive Chairman and President Terry Duffy. “Average daily volume reached nearly 15 million contracts, up more than 30 percent and representing the second highest quarterly volume in our history. This strong performance also reflects the success of our investments to spur organic growth by attracting trading from customers outside the United States. In addition, we have made significant progress with our OTC initiatives, which continue to drive more activity in our core products. As a result, our revenue during the quarter was up more than 20 percent, and earnings per share rose more than 50 percent.”
“We saw significant growth in every product area during the fourth quarter, ranging from 14 percent in metals to 41 percent in interest rates,” said CME Group Chief Executive Officer Phupinder Gill. “Total options rose 38 percent and futures grew 29 percent compared with the same period last year, while electronic options increased more than 50 percent. International volumes also grew by nearly 50 percent, reaching a record 3 million contracts per day in the fourth quarter. We also reached our highest level of open interest ever and broke the record for highest daily volume. Further, we restructured the business during the quarter, positioning ourselves to generate higher margins and earnings going forward.”
Fourth-quarter 2014 average daily volume was 14.8 million contracts, up 31 percent from fourth-quarter 2013, and the highest quarterly average daily volume since the first quarter of 2008. Clearing and transaction fee revenues were $713.0 million, up 24 percent compared with fourth-quarter 2013. Fourth-quarter 2014 total average rate per contract was 73.1 cents, up from 72.5 cents in third-quarter 2014, driven primarily by a higher proportion of total volume coming from commodities products, which have higher average fees.
As of December 31, 2014, the company had $1.4 billion of cash and marketable securities and $2.1 billion of long-term debt.
The company declared dividends during 2014 of $1.3 billion, including the annual variable dividend for 2014 of $671 million, which was paid in January 2015. The company has returned more than $4 billion to shareholders in the form of dividends since the implementation of the variable dividend policy in early 2012.
For the official announcement from CME Group, click here.