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Intercontinental Exchange (ICE) Reports Solid Volumes in Q3

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Intercontinental Exchange, Inc. (ICE - Free Report) has reported a solid average daily volume (ADV) for the third quarter of 2018. Agriculture and Metals increased 16% year over year. Volumes were driven by better numbers across all the months of the quarter.

The exchange operator witnessed record Emissions ADV, surging 65% year over year. While Gilt ADV improved 25% year over year, equity indices ADV was 31% higher. NYSE cash equities ADV grew 7% year over year.

With respect to monthly volumes, the company reported a year-over-year increase of 19% in Agriculture and Metals ADV, which rose to 0.5 million contracts. However, the company witnessed its Financials volume declining 5.4% to 3.1 million contracts per day. On the bright side, Commodities volume, which averaged approximately at 3.4 million contracts per day, improved 3.8% year over year. There were 19 trading days in September.

Energy volume inched up 1.8% to about 2.9 million contracts per day. Interest Rate volume decreased 4.4% to 2.4 million contracts per day whereas Equity Index volume declined 7.9% to 0.6 million contracts. Foreign exchange volume plunged 20% to nearly 0.04 million contracts.

Revenues per contract were 12 cents for the month, down 14.3% year over year.

Shares of Intercontinental Exchange have underperformed the industry year to date. The stock has gained 6.1% compared with the industry’s rally of 12.1%.



The company’s product portfolio along with a broad range of risk management services, strategic buyouts and a robust capital position should help the stock retain its growth momentum. This in turn, should also help the stock turn around in the near term.

Intercontinental Exchange is scheduled to report third-quarter 2018 results before the market opens on Oct 31. The Zacks Consensus Estimate for quarterly earnings is pegged at 81 cents per share on revenues of $1.2 billion, reflecting 12.5% and 5.6% year-over-year growth, respectively.

Our proven model conclusively shows that the company is likely to deliver a positive surprise this to-be-reported quarter. This is because the stock carries the right mix of ingredients for an earnings beat — a favorable Zacks Rank #3 (Hold) and an Earnings ESP of +0.50%.

Recently, securities exchanges, namely CME Group Inc. (CME - Free Report) and MarketAxess Holdings Ltd. (MKTX - Free Report) also posted respective monthly volumes.

While CME Group’s September ADV of 17.5 million contracts per day grew 3% year over year, MarketAxess has reported a trading volume of $136.6 billion for the same month.

Stock That Warrants a Look

Another stock from the same space that investors might want to consider is Cboe Global Markets, Inc. (CBOE - Free Report) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

Cboe Global operates as an options exchange in the United States. The company delivered positive surprises in three of the trailing four quarters with an average beat of 2.65%.

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