NEW YORK (Reuters) - CME Group Inc (CME.N), parent of the world's largest derivatives exchange, said on Tuesday quarterly profit nearly doubled, driven by strong volume growth.
Fourth-quarter net income at CME Group, which is in talks to buy the New York Mercantile Exchange, rose to $201 million, or $3.75 per share, from $103 million, or $2.91 per share, a year earlier.
"Obviously, volume was a huge driver in the equation -- it's about transactions and that's what we do," said CME executive chairman Terry Duffy in an interview.
Earnings were $3.77 per share, before special items, beating the average Wall Street target of $3.60, according to Reuters Estimates. Revenue increased 88 percent to $530.0 million, topping the average forecast of $521.5 million.
Volume during the quarter averaged 10.6 million contracts per day, up 23 percent from a year earlier. Total quarterly volume exceeded 676 million contracts, with a record 81 percent traded electronically.
CME Group's average rate per contract, a key measure of margins, rose to 64.8 cents in the fourth quarter from 62.2 cents in the third quarter.
LIFTS DIVIDEND
Also Tuesday, the company boosted its quarterly dividend by 34 percent to $1.15 per share, payable on March 25.
"This should give only a muted lift to shares given the company's formulaic approach to regular bumps, which make this relatively anticipated, and the modest absolute level of (dividend) yield," wrote Fox-Pitt Kelton analyst Edward Ditmire in a note to clients.
CME shares slumped $5 to $614 on the New York Stock Exchange amid a broad market sell-off, with the S&P 500 index (.SPX) off nearly 2 percent.
CME said last week that it was in talks to buy NYMEX Holdings Inc (NMX.N), parent of the New York Mercantile Exchange, for $11 billion.
Through the proposed merger, CME Group hopes to broaden its reach by buying the energy and precious metals mart.
The proposed deal keeps up a breakneck pace of consolidation among U.S. and global financial exchanges, many of which have staged successful initial public offerings in recent years.
Chicago-based CME Group was formed in July 2007, when Chicago Mercantile Holdings bought the Chicago Board of Trade.
Also Tuesday, trans-Atlantic exchange operator NYSE Euronext (NYX.N)(NYX.PA) posted a rise in fourth-quarter profit, benefiting from a surge in trading activity.
The parent of the New York Stock Exchange said profit jumped to $156 million, or 59 cents per share, from $45 million, or 29 cents per share, in the year-earlier period, which was prior to the Big Board's merger with Euronext.
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