Earnings Updates | Q4 2023

February 22, 2024by toleg.work

Over the past week, 62 companies from the S&P 500 index have already reported for the quarter ended December 31, 2023.

One of the best results was demonstrated by CME Group. Its revenue amounted to $1.4B. It grew by +4.3% compared to the corresponding value for the previous quarter and exceeded analysts’ expectations by 0.7%. Let’s analyze the company’s business in more detail.

CME Group owns exchange platforms that trade financial instruments on key stock indices, commodities, and interest rates. In addition, the company owns a 27% stake in S&P Dow Jones Indices, which makes the Chicago Mercantile Exchange the exclusive platform for trading and clearing futures contracts on S&P indices. CME Group has already absorbed such competitors as: CBOT Holdings, Nymex Holdings and NEX, and is gradually continuing its expansion in the industry.

The company’s revenues increased by +16% year-on-year. This was driven by increased demand in the agricultural commodities and interest rates segments, which grew by +17% and +16%, respectively. Also, in 2023, the average volume of traded contracts on CME Group increased by 5% year-on-year and reached a record 24M per day.

Manufacturing costs account for 20% of the revenue structure, and gross revenue for 80%. Over the past quarter, the company earned a profit of $814M. Its market capitalization is $75B.

After the publication of the report, CME Group’s shares rose by +3.7% to $215 per share. Market participants were pleased with the company’s strong financial results and responded positively to the company’s development prospects.

*surprise – % ratio between actual and expected revenue
**growth – % ratio of the amount of revenue for the last 4 quarters compared to this value calculated for the previous quarter

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