April 29, 2020 / 11:40 AM / a month ago

CME profit beats estimates on higher trading volumes amid virus-led crisis

April 29 (Reuters) - U.S. exchange operator CME Group’s first-quarter profit beat Wall Street estimates on Wednesday, benefiting from a spike in transactions as the coronavirus crisis hammered markets.

The rapid spread of the pandemic has ravaged global markets and led to market volatility, which has however, benefited exchange operators such as CME that make most of their money from clearing and settling trades.

Last week, CME’s rival Nasdaq Inc reported better-than-expected quarterly profit, also benefiting from the market volatility.

“During the quarter, we saw significantly increased levels of client hedging and risk transfer, across all products and time zones,” CME Chief Executive Officer Terry Duffy said.

Clearing and transaction fees, CME’s biggest revenue stream, jumped 34.2% to $1.28 billion as the company’s average daily volume (ADV) rose nearly 45% to 27.01 million contracts.

CME, which owns the Chicago Board of Trade, said revenue from the market data and information services business, which helps investors to make trading decisions and minimize risk, rose 1% to $131.5 million.

Net income attributable to the company rose to $766.2 million, or $2.14 per share, in the quarter ended March 31, from $496.9 million, or $1.39 per share, a year earlier.

Stripping out one-time items, the Chicago-based company earned a profit of $2.33 per share, exceeding expectations of a profit of $2.23 per share, according to IBES data from Refinitiv.

Total revenue rose 29% to $1.52 billion. (Reporting by Abhishek Manikandan in Bengaluru; Editing by Shinjini Ganguli)

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