Intercontinental Exchange (ICE - Free Report) reported second-quarter 2019 adjusted earnings per share of $1.07, which beat the Zacks Consensus Estimate by 2.9%. 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 7.5% year over year on higher revenues from transaction and clearing, data services, listings and other revenues. Moreover, the top line outpaced the Zacks Consensus Estimate by 0.5%.
Net revenues of Trading and Clearing segment were $710 million, up 12% year over year, while Data and Listings revenues were $685 million, up 3% year over year
Total operating expenses rose 5.3% year over year to $651 million, primarily due to higher compensation and professional services, technology and communication expenses, rent and occupancy and acquisition-related transaction and integration costs. Adjusted operating expenses were $575 million in the second quarter, up 6.5% from the year-ago quarter’s figure.
Adjusted operating income improved 8.2% year over year to $820 million. Adjusted operating margin expanded 100 basis points (bps) from the year-ago quarter to 59%.
Trading and Clearing's adjusted operating income of $545 million was up 11.3% year over year. Adjusted operating margin contracted 100 bps. Data and Listings' adjusted operating income rose 4.6% year over year to $366 million and adjusted operating margin of 53% was flat year over year.
Total Futures & Options totaled 5.6 million contracts, flat year over year. Revenue per contract of $1.17 increased 2% year over year.
As of Jun 30, 2020, Intercontinental Exchange had cash and cash equivalents of $1.873 billion, up nearly 5% from the level as of Dec 31, 2019. Long-term debt of $7.7 billion was up 46.7% from 2019-end level.
Total equity was $16.9 billion as of Jun 30, 2010, down 1.8% from 2019 end.
Operating cash flow was $1.4 billion in the first half of 2020, down 0.3% year over year. Free cash flow was $1.1 billion, up 10.9% year over year.
In the first half of 2020, the company returned $1.4 billion to its shareholders.
Third-Quarter 2020 Guidance
Data revenues are estimated between $575 million and $580 million.
Operating expenses are projected in the range of $651-$661 million. Adjusted operating expenses are expected to be in the range of $580 million to $590 million.
Non-operating expense is expected to be in the range of $20 million to $25 million.
Weighted average shares outstanding are anticipated between 542 million and 548 million shares.
Operating expenses are predicted in the band of $2.617-$2.667 billion. Adjusted operating expenses are expected to be in the range of $2.32 million to $2.37 million.
Capital expenditures are expected between $350 million and $370 million.
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
Nasdaq (NDAQ - Free Report) , MarketAxess Holdings (MKTX - Free Report) and CME Group’s (CME - Free Report) second-quarter earnings beat the Zacks Consensus Estimate.
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