Earnings preview: CME expected to shine on market volatility

OVERVIEW: The largest U.S. futures exchange operator, which runs the Chicago Mercantile Exchange and the Chicago Board of Trade, has benefited from volatility of the shaken capital markets. As investors shift positions, the exchange takes a fee for each move.

Average daily volumes rose sharply in each month during the period compared with a year ago, leading to a 33 percent gain in the full quarter, according to Citigroup.

BY THE NUMBERS: Analysts expect CME to report a profit of $4.81 per share, on average, according to Thomson Financial. The comparable year-ago result was $3.69 per share.

ANALYST TAKE: Citigroup analyst Donald Fandetti expects CME earnings to rise sharply because of the market turmoil.

"Results should be impressive as CME achieved a record level of volume following the turmoil in the financial markets," he wrote in a note to investors. The analyst expects all exchange operators to deliver solid earnings growth, but said CME "has the strongest franchise."

WHAT'S AHEAD: Citi's Fandetti says exchange operators face "headwinds" in the coming periods, with volume growth likely slowing as market volatility decreases.

"We believe the stocks could be flat to down over the next few quarter," he wrote. "Market structure stocks thrive on volatility but the pendulum may have swung a bit too far."

STOCK PERFORMANCE: CME shares fell 32 percent in the quarter to finish March at $469.10. The stock reached an all-time high of $714.48 in December. It closed Friday at $503.73.