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Intercontinental Exchange (ICE) Q4 Earnings: What to Expect?

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Intercontinental Exchange, Inc. (ICE - Free Report) is slated to report fourth-quarter 2017 results on Feb 7 before the market opens. Last quarter, the company surpassed the Zacks Consensus Estimate by 1.41%.

Let’s see, how things are shaping up for this announcement.

Intercontinental Exchange’s results are likely to have benefited from a strong performance in data and listing as well as trading and clearing segments. The Zacks Consensus Estimate for earnings in the to-be-reported period is pegged at 72 cents on revenues of $1.15 billion. While the bottom line reflects an increase of 1.4% from the year-ago quarter, the topline represents 0.6% improvement.

Volume growth is expected to have driven trading and clearing segment revenues.

The company also anticipates Data revenues to rise 6% year over year in 2017 with the metric for the fourth quarter estimated to better the third one’s tally. On the basis of company’s portfolio of proprietary pricing data, reference data, analytics, indices, futures data and desktops plus connectivity solutions, the data revenues might have increased. The Zacks Consensus Estimate for data service fees stands at $527 million, up 2.3% year over year.

Credit default swap clearing business is predicted to generate more than $110 million in revenues for 2017.

Sustained share buyback might have boosted the bottom line.

Intercontinental Exchange’s probable increase in expenses are attributable to higher compensation and benefits, technology and communication as well as selling, general and administrative expenses. The company projects interest expense at $50 million in the soon-to-be-reported quarter. Also, it estimates fourth-quarter expenses to be about $480 million.

Nonetheless, the company forecasts 2017 synergies of minimum $70 million, up from the prior guidance of $60 million.

What Our Quantitative Model Predicts

Our proven model does not conclusively show that Intercontinental Exchange is likely to beat estimates this quarter. This is because a stock needs to have the right combination of the two main ingredients — a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for an earnings beat. But that is not the case here as elaborated below.

Zacks ESP: Intercontinental Exchange has an Earnings ESP of -0.12%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

 

Zacks Rank: Intercontinental Exchange carries a Zacks Rank #2, which increases the predictive power of ESP. A company, however, needs a positive ESP to be confident about an earnings surprise. Thus, this combination leaves surprise prediction inconclusive.

We caution against all Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Some stocks worth considering from the finance sector with the right combination of elements to surpass expectations this time around are as follows:

The Carlyle Group L.P. (CG - Free Report) is set to report fourth-quarter earnings on Feb 7. The company has an Earnings ESP of +5.23% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Essent Group Ltd. (ESNT - Free Report) has an Earnings ESP of +1.94% and a Zacks Rank of 2. The company is scheduled to announce fourth-quarter earnings on Feb 9.

CNA Financial Corporation (CNA - Free Report) has an Earnings ESP of +2.75% and a Zacks Rank of 1. The company is scheduled to release fourth-quarter earnings on Feb 12.

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