UPDATE: CME Group 2Q Net Up 8.5% On Higher Revenue

CME Group Inc.'s (CME) second-quarter profit improved 8.5% as macroeconomic turmoil fueled trade in its interest rate, metals and agricultural futures markets, driving revenues to a record level.

The Chicago-based company also lowered its expectations for full-year costs to run its markets to $1.24 billion from $1.26 billion, while capital expenditures were also seen declining as CME sought to get a handle on expenses.

CME reported earnings of $293.7 million, or $4.38 a share, up from $270.7 million, or $4.11 a share, a year earlier. Revenue climbed 3% to $838.3 million.

Analysts polled by Thomson Reuters expected a per-share profit of $4.17 on revenue of $821 million.

Operating margin improved to 63.8% from 63.3%.

Escalating debt concerns facing euro-zone nations like Greece, Italy and Spain, lured more firms to hedge risk in CME's futures markets over the second quarter, lifting quarterly trading volume to match the level set in the year-ago period characterized by the May 2010 "flash crash." The end of the Federal Reserve's second round of quantitative easing also brought investors into CME's Treasury futures market.

Daily trading levels in CME's core interest-rate futures complex were boosted by a 61% jump in volumes of Eurodollar futures, linked to the London interbank offered rate.

The increased standing of lower-priced interest-rate futures contracts in CME's mix of products traded over the quarter prompted the average trading fee to dip to 80.7 cents per contract, the lowest level in the last four quarters though just slightly below the first quarter's average rate.

CME said it intended to launch a new slate of complementary Euribor futures and options, linked to rates denominated in euros, by the end of September. Its new London-based clearing facility, launched in May, has attracted 16 clearing firms and more than 60 clients and brokers.

Class A shares closed Wednesday at $278.51 and were inactive premarket.

-By Jacob Bunge and John Kell, Dow Jones Newswires; 312-750-4117; Jacob.Bunge@dowjones.com; john.kell@dowjones.com

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