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Intercontinental Exchange (ICE) Q2 Earnings In Line, Rise Y/Y

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Intercontinental Exchange (ICE - Free Report) reported second-quarter 2021 adjusted earnings per share of $1.16, which matched the Zacks Consensus Estimate. The bottom line improved 8.4% on a year-over-year basis.

The company witnessed improved revenues from Exchanges, Fixed Income, and Data Services and Mortgage Technology segments.

Performance in Detail  

Intercontinental Exchange’s revenues of $1.7 billion increased 22% year over year on higher revenues from Exchanges, Fixed Income, and Data Services and Mortgage Technology. However, the top line missed the Zacks Consensus Estimate by 0.4%.

Net revenues from Exchanges were $909 million, up 2% year over year. Fixed Income and Data Services revenues were $458 million, which increased 2.7% year over year. Mortgage Technology revenues increased sixfold to $340 million.

Adjusted operating expenses were $744 million for the second quarter, up 29.4% from the year-ago figure.

Adjusted operating income improved 17.4% year over year to $963 million. Adjusted operating margin, however, contracted 300 basis points (bps) from the year-ago quarter to 56%.

Exchanges' adjusted operating income of $607 million was down 0.6% year over year. Adjusted operating margin contracted 100 bps to 67%.

Fixed Income and Data Services' adjusted operating income declined 3.5% to $167 million and adjusted operating margin contracted 300 bps to 36%.

Mortgage Technology’s adjusted operating income of $189 million was up more than fivefold year over year. Adjusted operating margin contracted 600 bps to 56%.

Financial Update

As of Jun 30, 2021, Intercontinental Exchange had cash and cash equivalents of $1.64 billion, up nearly 4.1% from the level as of Dec 31, 2020. Long-term debt of $14.1 billion was up 0.06% from 2020-end level.

Total equity was $21.1 billion as of Jun 30, 2020, up 8.1% from 2020 end.

Operating cash flow was $1.6 billion in the first half of 2021, up 16.6% year over year. Free cash flow was $1.4 billion, up 33.6% year over year.

In the first half of 2020, the company returned $1.4 billion to its shareholders.

Third-Quarter 2021 Guidance

Total recurring revenues are estimated between $870 million and $885 million.

Operating expenses are projected in the range of $930-$940 million. Adjusted operating expenses are expected to be in the range of $770 million to $780 million and include $55 million related to Bakkt.

Non-operating expense is expected to be in the range of $110 million to $115 million.

Adjusted non-operating expense is expected to be in the range of $100 million to $105 million.

Weighted average shares outstanding are anticipated between 563 million and 569 million shares.

2021 View

Operating expenses are predicted in the band of $3.610 -$3.640 billion.

Adjusted operating expenses are expected to be in the range of $2.950 million to $2.980 million. It includes third-quarter Bakkt expense of $55 million.

Capital expenditures are expected between $430 million and $450 million.

Zacks Rank

Intercontinental Exchange currently carries a Zacks Rank #4 (Sell).  

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Securities and Exchanges

Second-quarter earnings of Nasdaq (NDAQ - Free Report) , MarketAxess Holdings (MKTX - Free Report) and CME Group (CME - Free Report) beat the respective Zacks Consensus Estimate.