Chicago Merc Profits, Revs, Volume Up
Mon Feb 11, 8:54 AM ET
CHICAGO (Reuters) - Chicago Mercantile Exchange Holdings Inc., the parent of the world's second largest futures exchange, said on Monday a surge in volume to record levels and higher clearing and transaction fees boosted fourth-quarter earnings 270 percent.
CME, based in Chicago, posted fourth-quarter profits of $17.3 million, or 59 cents per share, up from $4.7 million, or 16 cents per share, in the year-ago quarter.
Fourth quarter 2001 revenue was up 56 percent to a record $105.0 million from $67.2 million for the same period in 2000.
Operating margins were 27.9 percent for the fourth quarter of 2001, compared with 12.5 percent for the year-ago period.
For all of 2001, the exchange reported net income of $69.2 million, or $2.36 per diluted share. In 2000, CME posted a loss of $5.9 million or 21 cents per share as expenses from the transition to a for-profit organization and rising compensation costs weighed on results.
Revenues for the year rose 71 percent to a record $387.2 million from $226.6 million in 2000.
The Merc's futures on Eurodollars, which track the interest paid on three-month deposits of U.S. dollars in foreign banks, dethroned Germany's Eurex Bund futures and was the most actively traded futures contract in the world last year. All-electronic Eurex is the largest futures exchange in the world.
Record volume in Eurodollar futures and options, which made up about two-thirds of total exchange volume last year, pumped up profits, the exchange said.
Aggressive interest rate cuts from the Federal Reserve (news - web sites) in 2001 spurred the yearly volume increase, as did volatility in U.S. stocks and global and political uncertainty, the exchange said.
Although trading volume tends to be lower during the fourth quarter, the last quarter of 2001 was CME's fourth consecutive record quarter in volume. At 116.2 million contracts traded, last year's fourth quarter exceeded the previous year's by 91 percent.
CME Holdings' fourth quarter 2001 revenue growth was due primarily to a 66 percent increase in clearing and transaction fees, to $80.6 million, and a 41 percent increase in quotation data fees, to $12.4 million.
CME took a step toward a possible initial public offering in December 2001 when it reorganized as a wholly owned subsidiary of CME Holdings Inc. At the time, the exchange said the move provided "additional strategic and business flexibility."
The exchange has not specified if or when it plans to launch an IPO.
The world's number three futures exchange, the Chicago Board of Trade, has not yet announced when it will report fourth-quarter earnings. The exchange is in the process of transforming into a for-profit corporation. |
