CME Cutting Staff, Moving Some Operations to Ireland
April 26, 2012
Facing lower revenue as a result of calmer markets and growing operations costs, the Chicago Mercantile Exchange said in a earnings call conference that it has reduced its headcount by 35 to 2,702, will cut even more jobs via a “voluntary incentive plan,” and will also move some operations to its new facility in Belfast, Ireland.
The CME’s chief executive, Craig Donohue, will also resign ahead of schedule, in late May instead of at the end of the year.
“This will be my last earnings call,” he said during a conference call today with analysts.
CME President Phupinder Gill will succeed Donohue.
The exchange operator’s first quarter net income fell 42%, to $266.3 million, compared to a year ago, while revenue dipped 7% to $775 million. Average daily trading volume was down roughly 11%, to 12.3 million contracts per day. Clearing and transaction revenues were down 10% from a year ago to $621 million.
At the same time, operating expenses were up 5%, to $323 million.
However, CME’s earnings report wasn’t all bad news. First-quarter market data and information services revenue was $114 million, up 7% from a year ago. First-quarter total average rate per contract was up slightly, to 81.1 cents.
"During the first quarter, global trading volumes were impacted by low levels of volatility, particularly in financial instruments," said CME Group Executive Chairman Terry Duffy. "The uncertainty about market direction has led to a greater focus on the release of economic data that measures the overall health of the economy. While concerns remain, there are some positive signs that an improving economy would bode well for our product set as the trading community responds to better news."