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Intercontinental Exchange (ICE) Q4 Earnings Top, Dividend Up
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Intercontinental Exchange (ICE - Free Report) reported fourth-quarter 2020 adjusted earnings per share of $1.13, which beat the Zacks Consensus Estimate of $1.09. Also, the bottom line improved 18.9% on a year-over-year basis.
The company witnessed persistent revenue growth driven by strong Exchanges, Fixed Income and Data Services, and Mortgage Technology.
Performance in Detail
Intercontinental Exchange’s revenues of $1.7 billion increased 29% year over year on higher revenues from Exchanges, Fixed Income, and Data Services and Mortgage Technology. Moreover, the top line outpaced the Zacks Consensus Estimate of $1.6 billion.
Net revenues from Exchanges were $871 million, up 7% year over year, while Fixed Income and Data Services revenues were $450 million, which increased 3% year over year. Mortgage Technology revenues increased more than seven fold to $350 million.
Total operating expenses rose 31.8% year over year to $891 million, primarily due to higher compensation and benefits, professional services, acquisition-related transaction and integration costs, technology and communication expenses, rent and occupancy, along with selling, general and administrative expenses. Adjusted operating expenses were $712 million for the fourth quarter, up 24.9% from the year-ago figure.
Adjusted operating income improved 31.7% year over year to $959 million. Adjusted operating margin expanded 10 basis points (bps) from the year-ago quarter to 57%.
Exchanges' adjusted operating income of $582 million was up 7.8% year over year. Adjusted operating margin expanded 10 bps to 67%. Fixed Income and Data Services' adjusted operating income rose more than seven fold to $166 million and adjusted operating margin remained flat year over year at 37%. Mortgage Technology’s adjusted operating income of $582 million was up 2.1% year over year. Adjusted operating margin, however, contracted 10 bps to 60%.
Intercontinental Exchange Inc. Price, Consensus and EPS Surprise
As of Dec 31, 2020, Intercontinental Exchange had cash and cash equivalents of $1.6 billion, down 11.3% from the Dec 31, 2019 level. Long-term debt of $14.9 billion more than doubled from 2019-end level.
Total equity was $19.5 billion as of Dec 31, 2020, up 13% from 2019-end.
Operating cash flow was $2.9 billion for 2020, up 8% year over year. Free cash flow was $2.4 billion, up 4% year over year.
In 2020, the company bought back $1.2 billion worth shares and paid $669 million in dividends.
Full-Year Highlights
Adjusted earnings were $4.51 per share, up 16% year over year. The bottom line also beat the Zacks Consensus Estimate of $4.46.
Operating revenues of $6 billion for 2020 increased 16% year over year and marginally beat the consensus estimate.
This year marks the 15th consecutive year of record revenues and another year of double-digit earnings per share growth.
Adjusted operating margin was 59%, which expanded 10 bps.
Q1 Guidance
Operating expenses for first-quarter 2021 are projected in the range of $885-$895 million. Adjusted operating expenses are expected in the range of $720-$730 million.
Adjusted non-operating expense is expected in the range of $105-$110 million.
2021 View
Operating expenses are projected in the range of $3.465-$3.515 billion. Adjusted operating expenses are expected in the range of $2.83-$22.88 billion.
Weighted average shares outstanding are anticipated between 562 million and 568 million shares.
Capital expenditures are expected between $400 million and $430 million.
Dividend Update
The board of directors approved a 10% increase in its quarterly dividend to 33 cents per share. The first quarter cash dividend is payable on Mar 31, 2021 to stockholders of record on Mar 17, 2021.
Fourth-quarter earnings of Nasdaq (NDAQ - Free Report) and MarketAxess Holdings (MKTX - Free Report) beat the respective Zacks Consensus Estimate.
Upcoming Release
Cboe Global Markets (CBOE - Free Report) is set to report quarterly earnings on Feb 5. The Zacks Consensus Estimate for the same stands at $1.22 per share.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. Today, See These 5 Potential Home Runs >>
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Intercontinental Exchange (ICE) Q4 Earnings Top, Dividend Up
Intercontinental Exchange (ICE - Free Report) reported fourth-quarter 2020 adjusted earnings per share of $1.13, which beat the Zacks Consensus Estimate of $1.09. Also, the bottom line improved 18.9% on a year-over-year basis.
The company witnessed persistent revenue growth driven by strong Exchanges, Fixed Income and Data Services, and Mortgage Technology.
Performance in Detail
Intercontinental Exchange’s revenues of $1.7 billion increased 29% year over year on higher revenues from Exchanges, Fixed Income, and Data Services and Mortgage Technology. Moreover, the top line outpaced the Zacks Consensus Estimate of $1.6 billion.
Net revenues from Exchanges were $871 million, up 7% year over year, while Fixed Income and Data Services revenues were $450 million, which increased 3% year over year. Mortgage Technology revenues increased more than seven fold to $350 million.
Total operating expenses rose 31.8% year over year to $891 million, primarily due to higher compensation and benefits, professional services, acquisition-related transaction and integration costs, technology and communication expenses, rent and occupancy, along with selling, general and administrative expenses. Adjusted operating expenses were $712 million for the fourth quarter, up 24.9% from the year-ago figure.
Adjusted operating income improved 31.7% year over year to $959 million. Adjusted operating margin expanded 10 basis points (bps) from the year-ago quarter to 57%.
Exchanges' adjusted operating income of $582 million was up 7.8% year over year. Adjusted operating margin expanded 10 bps to 67%. Fixed Income and Data Services' adjusted operating income rose more than seven fold to $166 million and adjusted operating margin remained flat year over year at 37%. Mortgage Technology’s adjusted operating income of $582 million was up 2.1% year over year. Adjusted operating margin, however, contracted 10 bps to 60%.
Intercontinental Exchange Inc. Price, Consensus and EPS Surprise
Intercontinental Exchange Inc. price-consensus-eps-surprise-chart | Intercontinental Exchange Inc. Quote
Financial Update
As of Dec 31, 2020, Intercontinental Exchange had cash and cash equivalents of $1.6 billion, down 11.3% from the Dec 31, 2019 level. Long-term debt of $14.9 billion more than doubled from 2019-end level.
Total equity was $19.5 billion as of Dec 31, 2020, up 13% from 2019-end.
Operating cash flow was $2.9 billion for 2020, up 8% year over year. Free cash flow was $2.4 billion, up 4% year over year.
In 2020, the company bought back $1.2 billion worth shares and paid $669 million in dividends.
Full-Year Highlights
Adjusted earnings were $4.51 per share, up 16% year over year. The bottom line also beat the Zacks Consensus Estimate of $4.46.
Operating revenues of $6 billion for 2020 increased 16% year over year and marginally beat the consensus estimate.
This year marks the 15th consecutive year of record revenues and another year of double-digit earnings per share growth.
Adjusted operating margin was 59%, which expanded 10 bps.
Q1 Guidance
Operating expenses for first-quarter 2021 are projected in the range of $885-$895 million. Adjusted operating expenses are expected in the range of $720-$730 million.
Adjusted non-operating expense is expected in the range of $105-$110 million.
2021 View
Operating expenses are projected in the range of $3.465-$3.515 billion. Adjusted operating expenses are expected in the range of $2.83-$22.88 billion.
Weighted average shares outstanding are anticipated between 562 million and 568 million shares.
Capital expenditures are expected between $400 million and $430 million.
Dividend Update
The board of directors approved a 10% increase in its quarterly dividend to 33 cents per share. The first quarter cash dividend is payable on Mar 31, 2021 to stockholders of record on Mar 17, 2021.
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
Fourth-quarter earnings of Nasdaq (NDAQ - Free Report) and MarketAxess Holdings (MKTX - Free Report) beat the respective Zacks Consensus Estimate.
Upcoming Release
Cboe Global Markets (CBOE - Free Report) is set to report quarterly earnings on Feb 5. The Zacks Consensus Estimate for the same stands at $1.22 per share.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>