CME's quarterly profit jumps, bitcoin futures surge

Men enter the CME Group offices in New York, U.S., October 18, 2017. REUTERS/Brendan McDermid/File Photo

Oct 27 (Reuters) - CME Group Inc (CME.O) said on Wednesday its third-quarter profit more than doubled as trading in the futures exchange operators' interest rate and energy products surged, while the approval of exchange-traded funds (ETF) tied to CME bitcoin futures also lifted volumes.

Average daily volume at CME rose 14% from a year earlier to 17.8 million contracts, mainly driven by double-digit growth in interest rate futures, up 53%, and energy futures, up 18%, as economies around the globe reopen from COVID-19 lockdowns.

CME's bitcoin futures volumes rose 170% versus the third quarter of 2020, helped by the recent regulatory approval and launch of the first U.S. futures-linked bitcoin. read more

"The launch of ETFs based on CME's bitcoin futures is validation from the industry of what we've known for some time, that CME bitcoin futures are the leading source of bitcoin price discovery in the industry," Sean Tully, global head of financial and OTC products, said on a call with analysts.

So far in October, average daily volume for the company's bitcoin contracts is up 57% versus September, to over 12,000 contracts or more than 60,000 equivalent bitcoin worth a record $3.5 billion per day, he said.

Net profit attributable to CME rose to $926.5 million, or $2.58 per share, in the quarter ended Sept. 30, from $411.7 million, or $1.15 per share, a year earlier.

Stripping out one-time costs, the company earned $1.60 per share, four cents below the consensus estimate of analysts, according to IBES data from Refinitiv.

Total quarterly revenue was up nearly 3% to $1.11 billion, just off the mean estimate of analysts of $1.15 billion.

The majority of the miss relates to a new post-trade services company CME jointly launched with IHS Markit, said Daniel Fannon, an analyst at Jefferies.

Reporting by John McCrank in New York and Niket Nishant in Bengaluru; Editing by Krishna Chandra Eluri, Kirsten Donovan

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