February 12, 2020 / 12:28 PM / 16 days ago

UPDATE 1-Exchange operator CME Group profit misses on lower trading activity

(Adds analyst estimates, details on trading volumes, background)

Feb 12 (Reuters) - Exchange operator CME Group’s fourth-quarter profit missed Wall Street estimates on Wednesday, as lower trading activity squeezed fees it collects from clearing and settling transactions.

Trading volumes for exchange operators tumbled in the final quarter of the year, compared to a year ago, when financial markets were rocked by volatility stemming from a trade dispute between the United States and China. (reut.rs/3biolej)

Clearing and transaction fees, CME’s biggest revenue stream, fell 13% to $901 million as the average daily volume slumped 19% to 16.9 million contracts.

Cost-cutting measures partly offset the hit to trading volumes. Total expenses fell 4% to $565.4 million.

Net income attributable to the company rose to $469.5 million, or $1.31 per share, in the quarter ended Dec. 31, from $385.5 million, or $1.09 per share, a year earlier. (reut.rs/2SBotx3)

However, stripping out one-time items, the Chicago-based company earned a profit of $1.52 per share, while analysts had expected $1.54 per share, according to IBES data from Refinitiv.

Total revenue fell 8% to $1.14 billion. (Reporting by Bharath Manjesh in Bengaluru; Editing by Subhranshu Sahu)

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