CME Group 1Q Profit Falls, Matches Wall Street View

CME Group Inc , the world's largest futures exchange operator, reported a drop in first-quarter profit as trading in some of its more lucrative products slumped and average revenue per trade fell.

Net income declined to $235.8 million, or 71 cents a share, from $266.6 million, or 80 cents a share, a year earlier, the Chicago-based company reported on Thursday.

Excluding a $12 million expense due to currency losses, profit was 73 cents a share, in line with the average analyst estimate, according to a poll by Thomson Reuters I/B/E/S.

CME, which operates five U.S. futures exchanges and plans a sixth one in London, has struggled in recent quarters with lackluster trading.

Overall trading activity rose 1.4 percent in the quarter to 12.5 million contracts on an average day.

Trading in energy products, among CME's most lucrative, fell about 11 percent, and the average revenue per contract, a key measure for CME, fell to 78.5 cents from 81.1 cents in the year-ago quarter.

That helped drag down total sales to $718.6 million from $774.6 million.

Trading in April rose 8 percent, the company reported separately on Thursday, to 11.6 million on an average day.

One year into his tenure as CME chief executive, Phupinder Gill is sharpening his focus on international expansion as well as capturing new revenue from clearing over-the-counter swaps.

CME plans to open its new European exchange this summer, and Gill said in a statement that trading in Asia rose to a record in the first quarter.

Closer to home, new U.S. rules next month will require hedge funds to clear most swaps for the first time.

"We are working with hundreds of customers and many intermediaries to ensure operational readiness" by June 10, when the new swaps mandate comes into force, Gill said.

The company had $1.9 billion in cash and $2.9 billion in debt at the end of the quarter.

(Reporting by Ann Saphir; Editing by Jeffrey Benkoe)