(Adds share price, comments from conference call and analyst)
By Tom Polansek
Feb 5 (Reuters) - CME Group Inc, the world’s largest futures market operator, reported stronger-than-expected quarterly earnings on Friday as higher market data revenues helped offset a decline in trading volumes.
Shares rose 1.6 percent in morning trading as investors cheered the results and a rebound in volumes in 2016.
In the fourth quarter ended on Dec. 31, Chicago-based CME said net income dropped to $291.7 million, or 86 cents per share, from $306.5 million, or 91 cents per share, a year earlier. Daily trading volumes fell 11 percent to 13.2 million contracts.
However, the company earned 92 cents per share excluding items, topping analysts’ expectations for 90 cents, according to Thomson Reuters I/B/E/S. A year earlier, earnings were 95 cents.
Market data revenues in the quarter jumped 11 percent and should rise 4 percent to 5 percent in 2016, John Pietrowicz, chief financial officer, told analysts on a conference call.
CME delivered a “a solid 4Q beat on better pricing, with strong opening cost guidance during a busy start for 1Q volumes,” said Alex Kramm, analyst for UBS.
The average rate that CME customers paid per contract rose to 78.9 cents from 73.1 cents a year earlier, driven partially by strong energy volumes.
Exchange operators, including CME and rival IntercontinentalExchange, have reaped benefits in recent months as the long rout in world energy markets has intensified.
Turnover in their flagship oil contracts surged to record highs in January, according to data released this week, as whipsawing prices spurred a surge in interest from retail and speculative investors.
CME’s total average daily volume in January climbed to a record 18.2 million contracts a day, up 16 percent from a year earlier. The company, which owns the Chicago Board of Trade and New York Mercantile Exchange, also set a record for total open interest on Wednesday.
“We have had a great start to the year,” CME Chief Executive Phupinder Gill told analysts on the call.
In the fourth quarter, revenue fell 3.2 percent to $813.8 million. (Additional reporting by Nikhil Subba in Bengaluru; Editing by Chizu Nomiyama and Meredith Mazzilli)