Intercontinental Exchange (ICE - Free Report) reported fourth-quarter 2019 adjusted earnings per share of 95 cents, in line with the Zacks Consensus Estimate. Meanwhile, the bottom line inched up 1.1% on a year-over-year basis.
However, the company witnessed lower revenues and higher expenses in the quarter under review.
Performance in Detail
Intercontinental Exchange’s revenues of $1.3 billion dipped 0.8% year over year, mainly due to lower transaction and clearing. The top line also missed the Zacks Consensus Estimate by 0.2%.
Net revenues of Trading and Clearing segment were $626 million, down 5% year over year while Data and Listings revenues were $672 million, up 3% year over year.
Total operating expenses rose 7% year over year to $676 million, primarily due to higher compensation and benefits, technology and communication, and depreciation and amortization. Adjusted operating expenses were $570 million in the third quarter, up 3.1% from the year-ago figure.
Adjusted operating income slipped 3.6% year over year to $728 million.
Adjusted operating margin contracted 200 basis points (bps) from the year-ago quarter to 56%.
Trading and Clearing's adjusted operating income of $380 million was down 10.6% year over year. Adjusted operating margin contracted 400 bps to 61%.
Data and Listings' adjusted operating income rose 5.5% year over year to $348 million and adjusted operating margin of 52% expanded 100 bps.
Total Futures & Options came in at 5.2 million contracts, down 17% year over year. Revenue per contract of $1.14 increased 14% year over year.
Financial Update
As of Dec 31, 2019, Intercontinental Exchange had cash and cash equivalents of $841 million, up 16.2% from the level as of Dec 31, 2018.
Long-term debt of $5.2 billion was down 19% from the level at 2018 end.
Total equity was $17.2 billion as of Dec 31, 2019, up 0.3% from the level as of Dec 31, 2018.
Operating cash flow was $2.7 billion in 2019, up 5% year over year. Free cash flow was $2.3 billion, up 1.5% year over year.
Share Repurchase and Dividend Update
In 2019, the company bought back shares worth $1.5 billion and paid out dividends amounting to $621 million.
The company also took up a new share repurchase plan of $2.4 billion, effective Jan 1, 2020.
Q1 Guidance
Following fourth-quarter results, the company issued its first-quarter and 2020 outlook.
For the first quarter of 2020, the company expects its data revenues to be $560-$565 million while operating expenses are projected in the range of $570-$580 million.
2020 Guidance
Data revenues are estimated between $2.29 billion and $2.33 billion.
Operating expenses are predicted in the $2.275-$2.325 billion band.
Full-Year Update
For 2019, net revenues were $5.2 billion, up 4% year over year. Adjusted operating expenses for the year were $2.2 billion, up 5.7% year over year.
The company’s adjusted EPS for the period was $3.88, up 8% year over year.
Adjusted operating income for the full year was $3 billion, up 3.6% year over year.
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.
Upcoming Releases From Finance Sector
Some stocks worth considering from the finance sector with a perfect mix of elements to surpass estimates in the upcoming quarterly releases are as follows:
American International Group, Inc. (AIG - Free Report) is slated to announce fourth-quarter earnings on Feb 13. The stock has an Earnings ESP of +3.70% and is Zacks #3 Ranked.
Brighthouse Financial, Inc. (BHF - Free Report) has an Earnings ESP of +1.39% and a Zacks Rank #2 (Buy). The company is scheduled to release fourth-quarter earnings on Feb 10.
CME Group Inc. (CME - Free Report) is set to report fourth-quarter earnings on Feb 12. The stock is #3 Ranked and has an Earnings ESP of +0.19%.
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Intercontinental Exchange (ICE - Free Report) reported fourth-quarter 2019 adjusted earnings per share of 95 cents, in line with the Zacks Consensus Estimate. Meanwhile, the bottom line inched up 1.1% on a year-over-year basis.
However, the company witnessed lower revenues and higher expenses in the quarter under review.
Performance in Detail
Intercontinental Exchange’s revenues of $1.3 billion dipped 0.8% year over year, mainly due to lower transaction and clearing. The top line also missed the Zacks Consensus Estimate by 0.2%.
Net revenues of Trading and Clearing segment were $626 million, down 5% year over year while Data and Listings revenues were $672 million, up 3% year over year.
Total operating expenses rose 7% year over year to $676 million, primarily due to higher compensation and benefits, technology and communication, and depreciation and amortization. Adjusted operating expenses were $570 million in the third quarter, up 3.1% from the year-ago figure.
Adjusted operating income slipped 3.6% year over year to $728 million.
Adjusted operating margin contracted 200 basis points (bps) from the year-ago quarter to 56%.
Trading and Clearing's adjusted operating income of $380 million was down 10.6% year over year. Adjusted operating margin contracted 400 bps to 61%.
Data and Listings' adjusted operating income rose 5.5% year over year to $348 million and adjusted operating margin of 52% expanded 100 bps.
Total Futures & Options came in at 5.2 million contracts, down 17% year over year. Revenue per contract of $1.14 increased 14% year over year.
Financial Update
As of Dec 31, 2019, Intercontinental Exchange had cash and cash equivalents of $841 million, up 16.2% from the level as of Dec 31, 2018.
Long-term debt of $5.2 billion was down 19% from the level at 2018 end.
Total equity was $17.2 billion as of Dec 31, 2019, up 0.3% from the level as of Dec 31, 2018.
Operating cash flow was $2.7 billion in 2019, up 5% year over year. Free cash flow was $2.3 billion, up 1.5% year over year.
Share Repurchase and Dividend Update
In 2019, the company bought back shares worth $1.5 billion and paid out dividends amounting to $621 million.
The company also took up a new share repurchase plan of $2.4 billion, effective Jan 1, 2020.
Q1 Guidance
Following fourth-quarter results, the company issued its first-quarter and 2020 outlook.
For the first quarter of 2020, the company expects its data revenues to be $560-$565 million while operating expenses are projected in the range of $570-$580 million.
2020 Guidance
Data revenues are estimated between $2.29 billion and $2.33 billion.
Operating expenses are predicted in the $2.275-$2.325 billion band.
Full-Year Update
For 2019, net revenues were $5.2 billion, up 4% year over year. Adjusted operating expenses for the year were $2.2 billion, up 5.7% year over year.
The company’s adjusted EPS for the period was $3.88, up 8% year over year.
Adjusted operating income for the full year was $3 billion, up 3.6% year over year.
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.
Upcoming Releases From Finance Sector
Some stocks worth considering from the finance sector with a perfect mix of elements to surpass estimates in the upcoming quarterly releases are as follows:
American International Group, Inc. (AIG - Free Report) is slated to announce fourth-quarter earnings on Feb 13. The stock has an Earnings ESP of +3.70% and is Zacks #3 Ranked.
Brighthouse Financial, Inc. (BHF - Free Report) has an Earnings ESP of +1.39% and a Zacks Rank #2 (Buy). The company is scheduled to release fourth-quarter earnings on Feb 10.
CME Group Inc. (CME - Free Report) is set to report fourth-quarter earnings on Feb 12. The stock is #3 Ranked and has an Earnings ESP of +0.19%.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.7% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>
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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