CME Group Inc (NASDAQ:CME) stock rose 0.92% (As on October 26, 11:32:09 AM UTC-4, Source: Google Finance) after the company reported a rise in third-quarter profit as traders used the company’s products to hedge against volatility in markets roiled by economic and geopolitical uncertainty. On an adjusted basis, the company’s net income rose to $807.8 million, for the quarter ended September 30, from $710.0 million, a year earlier. As of September 30, CME had approximately $2.5 billion in cash and $3.4 billion of debt. Average daily volume of 22.3 million contracts was less than 1% off the record Q3 high set in Q3 2022. For the quarter, the capital expenditures were approximately $18 million. CME paid out $2.8 billion of dividends so far this year.

Further, completing the successful migration of Eurodollars to SOFR, the company continues to list other products to complement the interest rate complex today. The European short-term rate, or ESTR contracts, traded a record 10,000 contracts per day in September. The newly listed treasury bill futures launched on October 2, and the company have traded over 15,000 contracts in the first 3 weeks. This is one of the most successful launches of a [rates] product ever. The broad product offering and focus on capital efficiencies, such as the enhanced cost-margining agreement with DTCC going live in January of 2024, continue to enhance the value proposition for our customers using the products to manage their interest rate exposure. On the commodity side, third quarter 2023 volume was up 15% in total and included the highest-ever Q3 volume for our agricultural products.

CME in the third quarter of FY 23 has reported the adjusted earnings per share of $2.25, beating the analysts’ estimates for the adjusted earnings per share of $2.21. The company had reported the adjusted revenue growth of 9 percent to $1.30 billion in the third quarter of FY 23, missing the analysts’ estimates for revenue of $1.34 billion. Clearing and transaction fees and market data revenue each grew 9% versus Q3 ’22. The  adjusted operating margin for the quarter expanded to 66.5%, up approximately 240 basis points compared with the same period last year.

The company is maintaining the guidance of $60 million for the cloud migration expense for a total expense guidance of $1.535 billion excluding license fees. The company is lowering the core expense guidance, excluding license fees, to $1.475 billion, a $15 million decrease from the original guidance of $1.49 billion.