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Intercontinental Exchange (ICE) Tops Q4 Earnings; Costs Up
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Intercontinental Exchange, Inc. (ICE - Free Report) reported fourth-quarter 2016 adjusted earnings per share of 71 cents, beating the Zacks Consensus Estimate of 69 cents. Also, earnings improved 9.2% year over year.
Results were aided by growth across the company’s data and listings business segments. However, the quarter recorded higher expenses.
Adjusted net income of the reported quarter climbed 16% year over year to $428 million.
On GAAP basis, net income came in at $352 million or 59 cents per share compared to $370 million or 66 cents per share.
For 2016, adjusted net income was $1.67 billion or $2.78 per share, as against $1.36 billion or $2.43 per share in 2015. The Zacks Consensus Estimate for 2016 was $2.75.
Performance in Details
Total revenue of $5.96 billion in 2016 surpassed the Zacks Consensus Estimate of $4.49 billion. Also, revenues jumped 27.1% year over year.
For fourth-quarter 2016, revenues of $1.48 billion increased 21.7% year over year. Further, the reported figure surpassed the Zacks Consensus Estimate of $1.13 billion. This increase was primarily due to significant increase in data services revenues and rise in listings revenues, as well as transaction and clearing revenues. Other revenues remained flat year over year.
Total operating expenses surged 27% year over year to $580 million in the reported quarter. The rise primarily reflected higher compensation and benefits, technology and communication and depreciation and amortization.
Operating income grew 33.5% to $558 million. Operating margin was 49% in the reported quarter.
Financial Update
For 2016, cash flows from operations were $2.1 billion, up 64% year over year.
At the end of the quarter, Intercontinental Exchange had cash and cash equivalents of $407 million, down from $627 million as of Dec 31, 2015. Long-term debt was $3.87 billion, down from 4.72 billion at the prior-year end.
Total equity was $15.75 billion as of Dec 31, 2016, up from $14.84 billion as of Dec 31, 2015.
Guidance
For 2017, Intercontinental Exchange the company anticipates data services revenues to increase by at least 6% in constant currency.
Adjusted operating expenses are expected to be in the range of $1.94–$1.98 billion for 2017. For first-quarter 2017, adjusted operating expenses are estimated to be in the range of $495–$505 million.
Moreover, the company expects to realize expense synergies of about $60 million in 2017.
Regarding capital expenditures for 2017, the company expects $280–$300 million for operational capital expenditures and capitalized development to be in the range of $40 –$45 million for real estate capital expenditures.
Intercontinental Exchange's diluted share count for full-year 2017 is likely to be in the range of 595–605 million.
Our Take
Results of Intercontinental Exchange highlight a decent performance. The company remains well poised for growth given its strength in its energy franchise, increasing recurring market data revenues and strategic initiatives.
Intercontinental Exchange Inc. Price, Consensus and EPS Surprise
Among others, CBOE Holdings, Inc. (CBOE - Free Report) reported fourth-quarter 2016 adjusted earnings of 63 cents per share, beating the Zacks Consensus Estimate of 60 cents. Also, the bottom line increased 7% year over year.
CME Group Inc. (CME - Free Report) reported fourth-quarter 2016 adjusted earnings per share of $1.14, beating the Zacks Consensus Estimate of $1.10. The bottom line also improved 17.5% from the year-ago quarter.
Nasdaq, Inc. (NDAQ - Free Report) reported fourth-quarter 2016 adjusted earnings per share of 95 cents per share, beating the Zacks Consensus Estimate by a penny. Further, the bottom line improved 7% year over year.
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Intercontinental Exchange (ICE) Tops Q4 Earnings; Costs Up
Intercontinental Exchange, Inc. (ICE - Free Report) reported fourth-quarter 2016 adjusted earnings per share of 71 cents, beating the Zacks Consensus Estimate of 69 cents. Also, earnings improved 9.2% year over year.
Results were aided by growth across the company’s data and listings business segments. However, the quarter recorded higher expenses.
Adjusted net income of the reported quarter climbed 16% year over year to $428 million.
On GAAP basis, net income came in at $352 million or 59 cents per share compared to $370 million or 66 cents per share.
For 2016, adjusted net income was $1.67 billion or $2.78 per share, as against $1.36 billion or $2.43 per share in 2015. The Zacks Consensus Estimate for 2016 was $2.75.
Performance in Details
Total revenue of $5.96 billion in 2016 surpassed the Zacks Consensus Estimate of $4.49 billion. Also, revenues jumped 27.1% year over year.
For fourth-quarter 2016, revenues of $1.48 billion increased 21.7% year over year. Further, the reported figure surpassed the Zacks Consensus Estimate of $1.13 billion. This increase was primarily due to significant increase in data services revenues and rise in listings revenues, as well as transaction and clearing revenues. Other revenues remained flat year over year.
Total operating expenses surged 27% year over year to $580 million in the reported quarter. The rise primarily reflected higher compensation and benefits, technology and communication and depreciation and amortization.
Operating income grew 33.5% to $558 million. Operating margin was 49% in the reported quarter.
Financial Update
For 2016, cash flows from operations were $2.1 billion, up 64% year over year.
At the end of the quarter, Intercontinental Exchange had cash and cash equivalents of $407 million, down from $627 million as of Dec 31, 2015. Long-term debt was $3.87 billion, down from 4.72 billion at the prior-year end.
Total equity was $15.75 billion as of Dec 31, 2016, up from $14.84 billion as of Dec 31, 2015.
Guidance
For 2017, Intercontinental Exchange the company anticipates data services revenues to increase by at least 6% in constant currency.
Adjusted operating expenses are expected to be in the range of $1.94–$1.98 billion for 2017. For first-quarter 2017, adjusted operating expenses are estimated to be in the range of $495–$505 million.
Moreover, the company expects to realize expense synergies of about $60 million in 2017.
Regarding capital expenditures for 2017, the company expects $280–$300 million for operational capital expenditures and capitalized development to be in the range of $40 –$45 million for real estate capital expenditures.
Intercontinental Exchange's diluted share count for full-year 2017 is likely to be in the range of 595–605 million.
Our Take
Results of Intercontinental Exchange highlight a decent performance. The company remains well poised for growth given its strength in its energy franchise, increasing recurring market data revenues and strategic initiatives.
Intercontinental Exchange Inc. Price, Consensus and EPS Surprise
Intercontinental Exchange Inc. Price, Consensus and EPS Surprise | Intercontinental Exchange Inc. Quote
Intercontinental Exchange presently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Among others, CBOE Holdings, Inc. (CBOE - Free Report) reported fourth-quarter 2016 adjusted earnings of 63 cents per share, beating the Zacks Consensus Estimate of 60 cents. Also, the bottom line increased 7% year over year.
CME Group Inc. (CME - Free Report) reported fourth-quarter 2016 adjusted earnings per share of $1.14, beating the Zacks Consensus Estimate of $1.10. The bottom line also improved 17.5% from the year-ago quarter.
Nasdaq, Inc. (NDAQ - Free Report) reported fourth-quarter 2016 adjusted earnings per share of 95 cents per share, beating the Zacks Consensus Estimate by a penny. Further, the bottom line improved 7% year over year.
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In this latest Special Report, Zacks’ Aggressive Growth Strategist Brian Bolan explores a full-blown technological breakthrough in the making – autonomous cars. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>