(Adds financial details; CEO comments from conference call;
analyst view)
April 26 (Reuters) - CME Group Inc on Wednesday
posted first-quarter profits that beat Wall Street expectations,
as traders turned to the exchange operator's hedging products to
navigate market volatility related to worries about the banking
sector and slowing macroeconomic growth.
The recent regional banking failures along with the U.S.
Federal Reserve's continued rate hike cycle has roiled markets,
pushing demand for hedging tools in an increasingly uncertain
macroeconomic environment as investors try to dump risky assets.
"Throughout the entire quarter, there were shifting
perceptions about the Fed's near-term rate path as well as
significant banking concerns in March," CME Chief Executive
Officer Terry Duffy said on a call with analysts.
To help mitigate those risks, many firms turned to CME's
interest rate futures, which saw volumes rise 16% from a year
earlier to a record 14.5 million contracts, Duffy said.
Overall average daily volumes were up 4% at 26.9 million
contracts.
The exchange and clearinghouse operator's net income,
stripping out one-time items like M&A costs, was $2.42 per
share, 4 cents above the consensus estimate of analysts,
Refinitiv IBES data showed.
The beat was driven in part by higher-than-anticipated
revenue per contract, which benefited clearing and transaction
fees, Piper Sandler analyst Richard Repetto said in a client
note.
Clearing and transaction revenues in the quarter were up
5.5% at $1.2 billion. Overall revenue rose 7.1% from a year ago
to $1.4 billion.
(Reporting by John McCrank in New York and Jaiveer Singh
Shekhawat in Bengaluru; Editing by Krishna Chandra Eluri and
Richard Chang)
223-6643; Reuters Messaging:
john.mccrank.thomsonreuters.com@reuters.net))
