CME Group profit rises, tops analysts' estimates

CME Group Inc., the world's largest futures market, posted second-quarter profit that beat analysts' estimates on lower expenses and higher rates per contract.

Net income rose 10 percent to $222 million from $201 million a year earlier, Chicago-based CME said in a statement today. Per-share profit declined to $3.33 from $3.67, reflecting a 22 percent increase in the company's shares outstanding. Profit including last year's purchase of the New York Mercantile Exchange was $3.37 a share, 14 cents more than the average estimate of 18 analysts in a Bloomberg survey.

Revenue climbed 15 percent to $648 million, helped by a 5.3 percent increase in the average fee the company charges for every trade. CME cut expenses on an adjusted basis by 12 percent to $243 million, according to the statement. Daily average volume slumped 19 percent in the quarter as tightened credit in the global recession limited the amount of borrowed money used to trade.

"While the quarter was good, we're still cautious on a lack of a catalyst for volume growth," said Chris Allen, an analyst at Pali Capital in New York, who had predicted the company would earn $3.25 a share.

The need to hedge with futures has diminished as the Federal Reserve has cut its benchmark interest rate to as low as zero to stimulate the economy.

CME Group, which controls 98 percent of U.S. futures trading, fell $1.44 to $272.70 yesterday in Nasdaq Stock Market composite trading. The shares have risen 31 percent this year.

(CME Group will hold a conference call for analysts and investors at 8:30 a