Intercontinental Exchange (ICE - Free Report) reported third-quarter 2020 adjusted earnings per share of $1.03, which beat the Zacks Consensus Estimate by 4%. Also, the bottom line improved 13.8% on a year-over-year basis.
The company witnessed continued revenue growth driven by strong Trading and Clearing as well as Data and Listings.
Performance in Detail
Intercontinental Exchange’s revenues of $1.4 billion increased 5.6% year over year on higher revenues from transaction and clearing, data services, and other revenues. Moreover, the top line outpaced the Zacks Consensus Estimate by about 3.1%.
Net revenues of Trading and Clearing segment were $711 million, up 6% year over year, while Data and Listings revenues were $700 million, up 5% year over year
Total operating expenses rose 24.4% year over year to $784 million, primarily due to higher compensation and benefits, professional services, technology and communication expenses, rent and occupancy, selling, general and administrative expenses and acquisition-related transaction and integration costs. Adjusted operating expenses were $661 million in the third quarter, up 20% from the year-ago quarter’s figure.
Adjusted operating income improved 1.9% year over year to $800 million. Adjusted operating margin contracted 20 basis points (bps) from the year-ago quarter to 57%.
Trading and Clearing's adjusted operating income of $429 million was up 2.1% year over year. Adjusted operating margin contracted 400 bps. Data and Listings' adjusted operating income rose 6.9% year over year to $371 million and adjusted operating margin expanded 100 bps to 53%.
Total Futures & Options totaled 4.9 million contracts, down 15% year over year. Revenue per contract of $1.12 increased 2% year over year.
Intercontinental Exchange Inc. Price, Consensus and EPS Surprise
Financial Update
As of Sep 30, 2020, Intercontinental Exchange had cash and cash equivalents of $1.6 billion, down 10.1% from the level as of Dec 31, 2019. Long-term debt of $14.9 billion was up 183.2% from 2019-end level.
Total equity was $19 billion as of Sep 30, 2010, up 10.2% from 2019 end.
Operating cash flow was $1.8 billion in the first nine months of 2020, down 3.6% year over year. Free cash flow was $1.6 billion, up 6.7% year over year.
In the third quarter of 2020, the company bought back $1.2 billion worth shares and paid $500 million in dividends.
Fourth-Quarter 2020 Guidance
Data revenues are estimated between $590 million and $595 million.
Operating expenses are projected in the range of $855-$865 million. Adjusted operating expenses are expected to be in the range of $695 million to $705 million.
Non-operating expense is expected to be in the range of $75 million to $80 million.
Weighted average shares outstanding are anticipated between 562 million and 568 million shares.
2020 View
Capital expenditures are expected between $410 million and $420 million.
Zacks Rank
Intercontinental Exchange currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Securities and Exchanges
Third-quarter earnings of Nasdaq (NDAQ - Free Report) and MarketAxess Holdings (MKTX - Free Report) beat the respective Zacks Consensus Estimate while CME Group (CME - Free Report) missed the same.
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Intercontinental Exchange (ICE - Free Report) reported third-quarter 2020 adjusted earnings per share of $1.03, which beat the Zacks Consensus Estimate by 4%. Also, the bottom line improved 13.8% on a year-over-year basis.
The company witnessed continued revenue growth driven by strong Trading and Clearing as well as Data and Listings.
Performance in Detail
Intercontinental Exchange’s revenues of $1.4 billion increased 5.6% year over year on higher revenues from transaction and clearing, data services, and other revenues. Moreover, the top line outpaced the Zacks Consensus Estimate by about 3.1%.
Net revenues of Trading and Clearing segment were $711 million, up 6% year over year, while Data and Listings revenues were $700 million, up 5% year over year
Total operating expenses rose 24.4% year over year to $784 million, primarily due to higher compensation and benefits, professional services, technology and communication expenses, rent and occupancy, selling, general and administrative expenses and acquisition-related transaction and integration costs. Adjusted operating expenses were $661 million in the third quarter, up 20% from the year-ago quarter’s figure.
Adjusted operating income improved 1.9% year over year to $800 million. Adjusted operating margin contracted 20 basis points (bps) from the year-ago quarter to 57%.
Trading and Clearing's adjusted operating income of $429 million was up 2.1% year over year. Adjusted operating margin contracted 400 bps. Data and Listings' adjusted operating income rose 6.9% year over year to $371 million and adjusted operating margin expanded 100 bps to 53%.
Total Futures & Options totaled 4.9 million contracts, down 15% year over year. Revenue per contract of $1.12 increased 2% year over year.
Intercontinental Exchange Inc. Price, Consensus and EPS Surprise
Financial Update
As of Sep 30, 2020, Intercontinental Exchange had cash and cash equivalents of $1.6 billion, down 10.1% from the level as of Dec 31, 2019. Long-term debt of $14.9 billion was up 183.2% from 2019-end level.
Total equity was $19 billion as of Sep 30, 2010, up 10.2% from 2019 end.
Operating cash flow was $1.8 billion in the first nine months of 2020, down 3.6% year over year. Free cash flow was $1.6 billion, up 6.7% year over year.
In the third quarter of 2020, the company bought back $1.2 billion worth shares and paid $500 million in dividends.
Fourth-Quarter 2020 Guidance
Data revenues are estimated between $590 million and $595 million.
Operating expenses are projected in the range of $855-$865 million. Adjusted operating expenses are expected to be in the range of $695 million to $705 million.
Non-operating expense is expected to be in the range of $75 million to $80 million.
Weighted average shares outstanding are anticipated between 562 million and 568 million shares.
2020 View
Capital expenditures are expected between $410 million and $420 million.
Zacks Rank
Intercontinental Exchange currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Securities and Exchanges
Third-quarter earnings of Nasdaq (NDAQ - Free Report) and MarketAxess Holdings (MKTX - Free Report) beat the respective Zacks Consensus Estimate while CME Group (CME - Free Report) missed the same.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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