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Intercontinental Exchange (ICE) Q4 Earnings Top, Dividend Up
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Intercontinental Exchange (ICE - Free Report) reported fourth-quarter 2021 adjusted earnings per share of $1.34, which beat the Zacks Consensus Estimate of $1.32. Also, the bottom line improved 16.5% on a year-over-year basis.
ICE witnessed persistent revenue growth driven by strong Exchanges and Fixed Income and Data Services. Revenues across the asset classes improved, generating double-digit growth in recurring revenues.
Intercontinental Exchange Inc. Price, Consensus and EPS Surprise
Intercontinental Exchange’s revenues, less transaction-based expenses, of $1.8 billion increased 10.1% year over year on higher revenues from Exchanges and Fixed Income, and Data Services. The top line met the Zacks Consensus Estimate.
Net revenues from Exchanges were $1 billion, up 17% year over year. Fixed Income and Data Services revenues were $480 million, which increased 7% year over year. Mortgage Technology revenues decreased 1% to $346 million.
Total operating expenses rose 7.7% year over year to $960 million, primarily due to higher compensation and benefits, professional services, acquisition-related transaction and integration costs, technology and communication expenses, and rent and occupancy. Adjusted operating expenses were $749 million in the fourth quarter, up 5% from the year-ago figure.
Adjusted operating income improved 14% year over year to $1.1 billion. Adjusted operating margin expanded 200 basis points (bps) from the year-ago quarter to 59%.
Exchanges' adjusted operating income of $722 million was up 25% year over year. Adjusted operating margin expanded 400 bps to 71%. Fixed Income and Data Services' adjusted operating income rose 8% to $180 million. Adjusted operating margin expanded 100 bps to 38%. Mortgage Technology’s adjusted operating income of $189 million was down 11% year over year. Adjusted operating margin, however, contracted 500 bps to 55%.
Financial Update
As of Dec 31, 2021, Intercontinental Exchange had cash and cash equivalents of $1.6 billion, up 3.7% from the Dec 31, 2020 level. Long-term debt of $12.4 billion declined 12.2% from the 2020-end level.
Total equity was $22.7 billion as of Dec 31, 2020, up 16.3% from 2020-end.
Operating cash flow was a record $3.1 billion for 2021, up 8.4% year over year. Free cash flow was a record $2.8 billion, up 17% year over year.
ICE repurchased $250 million worth of shares in the fourth quarter and paid out $747 million in dividends in 2021.
Full-Year Highlights
Adjusted earnings were $5.15 per share, up 17% year over year. The bottom line also beat the Zacks Consensus Estimate of $5.13.
Operating revenues of $7.1 billion for 2021 increased 7% year over year and were in line with the consensus estimate.
This year marks the 16th consecutive year of record revenues and another year of double-digit earnings per share growth.
The adjusted operating margin was 58%, which contracted 100 bps.
Q1 Guidance
Operating expenses for first-quarter 2022 are projected in the range of $900-$910 million. Adjusted operating expenses are expected in the range of $740-$750 million.
Adjusted non-operating expense is expected in the range of $105-$110 million.
Weighted average shares outstanding are anticipated between 562 million and 568 million shares.
2022 View
Operating revenues are projected in the range of $3.68-$3.75 billion.
Operating expenses are expected in the range of $3.619-$3.669 billion. Adjusted operating expenses are expected in the range of $2.99-$3.04 billion.
Capital expenditures are expected between $490 million and $520 million.
Dividend Update
The board of directors approved a 1% increase in its quarterly dividend to 33 cents per share. The first-quarter cash dividend will be paid out on Mar 31, 2022 to stockholders of record as of Mar 17, 2022.
Fourth-quarter earnings of Nasdaq (NDAQ - Free Report) beat the Zacks Consensus Estimate while that of MarketAxess Holdings (MKTX - Free Report) missed expectations.
Nasdaq’s fourth-quarter 2021 adjusted earnings per share of $1.93 beat the Zacks Consensus Estimate of $1.78 by nearly 8.4%. The bottom line improved 21% year over year. Revenues of $885 million increased 12% year over year. The Nasdaq Stock Market welcomed 1,000 new company listings in 2021, including 752 IPOs representing $181 billion in capital raised.
Nasdaq expects its 2022 non-GAAP operating expense in the range of $1.68 billion to $1.76 billion.
MarketAxess’ fourth-quarter 2021 earnings per share of $1.37 missed the Zacks Consensus Estimate of $1.43. Also, the bottom line declined from $1.91 per share a year ago. Total revenues decreased 3.6% to $165.1 million but marginally beat the Zacks Consensus Estimate of $164 million. Emerging markets volume increased 15% year over year to $160.6 billion. For the fourth quarter, the company announced active total client firms of 1,877, while international client firms were recorded at 956. Total credit category’s trading volumes decreased to $604.4 billion from $639.6 billion in the prior-year period.
MarketAxess projects expenses in the range of $385-$415 million, whose mid-point indicates an increase from the 2021 level of $361.7 million. Capital expenditure for 2022 is expected within $58-$62 million.
Upcoming Release
Cboe Global Markets (CBOE - Free Report) is set to report quarterly earnings on Feb 4. The Zacks Consensus Estimate for the same stands at $1.53 per share, indicating an upside of 26.5% from the year-ago reported quarter figure. The consensus mark for revenues is pegged at $387.2 million, indicating an increase of 26.1% from the year-ago quarter reported figure.
Cboe Global beat earnings estimates in all the three reported quarters of 2021.
Cboe Global guided core expenses to rise in 2021, with adjusted operating expenses expected to be in the range of $536 million to $541 million.
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Intercontinental Exchange (ICE) Q4 Earnings Top, Dividend Up
Intercontinental Exchange (ICE - Free Report) reported fourth-quarter 2021 adjusted earnings per share of $1.34, which beat the Zacks Consensus Estimate of $1.32. Also, the bottom line improved 16.5% on a year-over-year basis.
ICE witnessed persistent revenue growth driven by strong Exchanges and Fixed Income and Data Services. Revenues across the asset classes improved, generating double-digit growth in recurring revenues.
Intercontinental Exchange Inc. Price, Consensus and EPS Surprise
Intercontinental Exchange Inc. price-consensus-eps-surprise-chart | Intercontinental Exchange Inc. Quote
Performance in Detail
Intercontinental Exchange’s revenues, less transaction-based expenses, of $1.8 billion increased 10.1% year over year on higher revenues from Exchanges and Fixed Income, and Data Services. The top line met the Zacks Consensus Estimate.
Net revenues from Exchanges were $1 billion, up 17% year over year. Fixed Income and Data Services revenues were $480 million, which increased 7% year over year. Mortgage Technology revenues decreased 1% to $346 million.
Total operating expenses rose 7.7% year over year to $960 million, primarily due to higher compensation and benefits, professional services, acquisition-related transaction and integration costs, technology and communication expenses, and rent and occupancy. Adjusted operating expenses were $749 million in the fourth quarter, up 5% from the year-ago figure.
Adjusted operating income improved 14% year over year to $1.1 billion. Adjusted operating margin expanded 200 basis points (bps) from the year-ago quarter to 59%.
Exchanges' adjusted operating income of $722 million was up 25% year over year. Adjusted operating margin expanded 400 bps to 71%. Fixed Income and Data Services' adjusted operating income rose 8% to $180 million. Adjusted operating margin expanded 100 bps to 38%. Mortgage Technology’s adjusted operating income of $189 million was down 11% year over year. Adjusted operating margin, however, contracted 500 bps to 55%.
Financial Update
As of Dec 31, 2021, Intercontinental Exchange had cash and cash equivalents of $1.6 billion, up 3.7% from the Dec 31, 2020 level. Long-term debt of $12.4 billion declined 12.2% from the 2020-end level.
Total equity was $22.7 billion as of Dec 31, 2020, up 16.3% from 2020-end.
Operating cash flow was a record $3.1 billion for 2021, up 8.4% year over year. Free cash flow was a record $2.8 billion, up 17% year over year.
ICE repurchased $250 million worth of shares in the fourth quarter and paid out $747 million in dividends in 2021.
Full-Year Highlights
Adjusted earnings were $5.15 per share, up 17% year over year. The bottom line also beat the Zacks Consensus Estimate of $5.13.
Operating revenues of $7.1 billion for 2021 increased 7% year over year and were in line with the consensus estimate.
This year marks the 16th consecutive year of record revenues and another year of double-digit earnings per share growth.
The adjusted operating margin was 58%, which contracted 100 bps.
Q1 Guidance
Operating expenses for first-quarter 2022 are projected in the range of $900-$910 million. Adjusted operating expenses are expected in the range of $740-$750 million.
Adjusted non-operating expense is expected in the range of $105-$110 million.
Weighted average shares outstanding are anticipated between 562 million and 568 million shares.
2022 View
Operating revenues are projected in the range of $3.68-$3.75 billion.
Operating expenses are expected in the range of $3.619-$3.669 billion. Adjusted operating expenses are expected in the range of $2.99-$3.04 billion.
Capital expenditures are expected between $490 million and $520 million.
Dividend Update
The board of directors approved a 1% increase in its quarterly dividend to 33 cents per share. The first-quarter cash dividend will be paid out on Mar 31, 2022 to stockholders of record as of Mar 17, 2022.
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) beat the Zacks Consensus Estimate while that of MarketAxess Holdings (MKTX - Free Report) missed expectations.
Nasdaq’s fourth-quarter 2021 adjusted earnings per share of $1.93 beat the Zacks Consensus Estimate of $1.78 by nearly 8.4%. The bottom line improved 21% year over year. Revenues of $885 million increased 12% year over year. The Nasdaq Stock Market welcomed 1,000 new company listings in 2021, including 752 IPOs representing $181 billion in capital raised.
Nasdaq expects its 2022 non-GAAP operating expense in the range of $1.68 billion to $1.76 billion.
MarketAxess’ fourth-quarter 2021 earnings per share of $1.37 missed the Zacks Consensus Estimate of $1.43. Also, the bottom line declined from $1.91 per share a year ago. Total revenues decreased 3.6% to $165.1 million but marginally beat the Zacks Consensus Estimate of $164 million. Emerging markets volume increased 15% year over year to $160.6 billion. For the fourth quarter, the company announced active total client firms of 1,877, while international client firms were recorded at 956. Total credit category’s trading volumes decreased to $604.4 billion from $639.6 billion in the prior-year period.
MarketAxess projects expenses in the range of $385-$415 million, whose mid-point indicates an increase from the 2021 level of $361.7 million. Capital expenditure for 2022 is expected within $58-$62 million.
Upcoming Release
Cboe Global Markets (CBOE - Free Report) is set to report quarterly earnings on Feb 4. The Zacks Consensus Estimate for the same stands at $1.53 per share, indicating an upside of 26.5% from the year-ago reported quarter figure. The consensus mark for revenues is pegged at $387.2 million, indicating an increase of 26.1% from the year-ago quarter reported figure.
Cboe Global beat earnings estimates in all the three reported quarters of 2021.
Cboe Global guided core expenses to rise in 2021, with adjusted operating expenses expected to be in the range of $536 million to $541 million.