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What Awaits Intercontinental Exchange (ICE) in Q1 Earnings?

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Intercontinental Exchange, Inc. (ICE - Free Report) is slated to report first-quarter 2019 results on May 2, before market open. The company delivered positive surprise in the last four quarters with the average being 2.95%.

Factors to Consider

Intercontinental Exchange’s first-quarter results are likely to benefit from a broad range of risk management services including trade execution, market data, pre and post-trade processing and clearing services on an integrated platform.

Solid segmental revenues are expected to aid top-line growth. The Zacks Consensus Estimate for revenues is pegged at $1.3 billion, indicating an upside of 3.6% from the year-ago reported figure.

In the first quarter, Intercontinental Exchange delivered improved average daily volume (ADV), attributable to better numbers across all the months of the period. Volume growth is expected to have benefited trading and clearing segment revenues

Riding on the strength of continued strong pricing and analytics plus a favorable performance at connectivity and feeds business, the company is expected to witness better data revenues in the to-be-reported period. The Zacks Consensus Estimate for data service fees is pegged at $543 million, indicating an increase of 4.4% from the year-ago reported figure.

Share buybacks should provide additional boost to the bottom line.

Expenses are likely to be on the higher side due to increase in compensation and benefits, acquisition-related transaction and integration as well as technology and communication costs. This, in turn, might restrict margin expansion and hurt the company’s overall performance.

The Zacks Consensus Estimate for earnings is pegged at 89 cents, indicating a decline of 1.1% from the prior-year quarter reported figure.

What Our Quantitative Model States

Our proven model does not conclusively show that Intercontinental Exchange is likely to beat on earnings in the to-be-reported period. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.

Earnings ESP: Intercontinental Exchange has an Earnings ESP of -0.15%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Intercontinental Exchange Inc. Price and EPS Surprise

Zacks Rank: Intercontinental Exchange carries a Zacks Rank #3, which increases the predictive power of ESP. However, we need to have a positive ESP to be confident about a positive surprise.

We caution against the Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Some stocks worth considering from the finance sector with the perfect mix of elements to surpass estimates this time around are as follows:

AerCap Holdings N.V. (AER - Free Report) is set to report first-quarter earnings on May 1. The company has an Earnings ESP of +1.88% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Allstate Corporation (ALL - Free Report) has an Earnings ESP of +0.70% and a Zacks Rank of 3. The company is slated to announce first-quarter earnings on May 1.

Ares Management L.P.  (ARES - Free Report) has an Earnings ESP of +3.20% and is a Zacks #3 Ranked player. The company is scheduled to release first-quarter earnings on May 2.

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