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Intercontinental Exchange (ICE) Q2 Earnings Meet, View Down

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Intercontinental Exchange, Inc. (ICE - Free Report) reported second-quarter 2017 adjusted earnings per share of 75 cents, which was in line with Zacks Consensus Estimate. Earnings improved 9% on a year-over-year basis.

The quarter witnessed growth in data and listings business segments and lower expenses aiding operating profit.

Intercontinental Exchange Inc. Price, Consensus and EPS Surprise

On a GAAP basis, net income was 70 cents per share, up 17% year over year.
Performance in Detail

Intercontinental Exchange’s revenues of $1.5 billion dipped 0.7% year over year due to lower transaction and clearing revenues. Data and listings revenues however increased 4%.

Revenues beat the Zacks Consensus Estimate of $1.2 billion.

Total revenues and less transaction-based expenses, improved 4.3% year over year to $1.18 billion. This marks the 17th straight quarter of revenue growth.

Total operating expenses decreased 1.6% year over year to $569 million, primarily driven by lower compensation and benefits, professional service, acquisition-related transaction as well as integration costs.

Operating income improved 10.5% to $582 million.    

Financial Update

At the end of the reported quarter, Intercontinental Exchange had cash and cash equivalents of $398 million, down 2.2% from Dec 31, 2016. Long-term debt of $3.8 billion remained almost flat with 2016-end level.

Total equity was $15.9 billion as of Jun 30, 2017 compared with $15.7 billion as of Jun 30, 2016.

Capital Deployment

Intercontinental Exchange paid back $700 million to shareholders in the first half of 2017. The company remains on track to pay back $1.4 billion in 2017.


Adjusted operating expenses are estimated between $480 million and $490 million for the third quarter (down from the earlier guided-range of $485-$495 million).

Interest expense is projected to be $47 million in the third quarter and $49 million for the fourth quarter.

Intercontinental Exchange’s diluted share count for second quarter is likely to be in the range of 590–595 million.

Our Take

Results of Intercontinental Exchange reveal a solid performance. The company remains well-poised for growth, given its strength in its energy franchise, increasing recurring market data revenues and strategic initiatives.

Intercontinental Exchange presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Among other securities exchanges, MarketAxess, Inc. (MKTX - Free Report) , CME Group Inc. (CME - Free Report) and Nasdaq, Inc. (NDAQ - Free Report) beat their respective Zacks Consensus Estimate in the reported quarter.

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