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Will Intercontinental Exchange (ICE) Q4 Earnings Top Estimates?

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Intercontinental Exchange Group (ICE - Free Report) is slated to report fourth-quarter 2020 results on Feb 4, before market open. The company beat estimates in all the three reported quarters of 2020.

Let’s see how things have shaped up for this announcement.

Diversified asset class, balanced mix of recurring and transaction-based revenues, continued growth across its business lines and market volatility are expected to have benefited fourth- quarter performance of Intercontinental Exchange.

Nonetheless, a sustained low interest rate environment is likely to have weighed on retail and mini trading activity.

The company estimates continued momentum in data revenue growth to drive global data services, pricing & analytics as well as desktops and connectivity solutions. Management estimates fourth-quarter data revenues to be $590-$595 million. Notably, it now anticipates full-year data services revenues to be $2.32 billion, which lies above the mid-point of the original guidance of $2.29-$2.33 billion.

Annual subscription value (ASV) is likely to have increased in the fourth quarter.

Pricing & analytics is expected to have benefited from continued strong contributions from fixed income index business, robust customer demand for pricing and reference data products, strong retention rate of existing customers, addition of customers, increased purchases by existing customers and increases in pricing of products.

The acquisition of Ellie Mae is expected to be accretive to fourth-quarter results.

Under fixed income, Mortgage Services revenues are likely to have benefited from strong refinancing trends and adoption of digital mortgage solution.

Expenses are likely to have increased given several strategic initiatives including product launches, technology upgrade as well as higher debt and integration expenses, capital and infrastructural costs, rebates and compensation and benefits expenses. Management estimates marketing expenses to increase in the fourth quarter, given a robust IPO pipeline and the launch of back mobile consumer finance app. This, in turn, might have restricted margin expansion and hurt the company’s overall performance. For fourth-quarter 2020, adjusted operating expenses are expected to be $695-$705 million, which includes $105-$110 million on account of the Ellie Mae buyout.

The Zacks Consensus Estimate for earnings is pegged at $1.09, indicating an increase of 14.7% from the prior-year quarter reported figure. The Zacks Consensus Estimate for revenues is pegged at $1.6 billion, indicating 25.5% increase from the year-ago reported figure.

What the Zacks Model Says

Our proven model predicts an earnings beat for Intercontinental Exchange this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: Intercontinental Exchange has an Earnings ESP of +0.40%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: Intercontinental Exchange currently carries a Zacks Rank of 3.

Other Stocks to Consider

Some other stocks worth considering from the insurance space with a perfect mix of elements to surpass estimates in their upcoming quarterly releases are as follows:

Aflac (AFL - Free Report) has an Earnings ESP of +0.96% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Sun Life Financial (SLF - Free Report) has an Earnings ESP of +12.50% and a Zacks Rank of 2, at present.

Cigna Corporation (CI - Free Report) has an Earnings ESP of +1.91% and a Zacks Rank #3.

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