Intercontinental Exchange (ICE) is the largest global stock and derivative exchange operator post the NYSE acquisition in Nov 2013. With disciplined expense management, strategic acquisitions and consistent focus on organic growth initiatives boost operating leverage.
Timely achievement of cost synergies and global expansion strategy are expected to contribute positively to earnings. ICE is equally focused on re-launching ICE Future Singapore and ICE Clear Singapore by the end of this year. Alongside, strong operating cash flow and improved financial leverage also help maintain a healthy balance sheet.
ICE’s tactical business model is crucial for countering risks from stiff competition, currency fluctuations, weak rate per contract and regulatory challenges, also evident from consensus estimate being south bound for 2015 and 2016.
Overall, ICE has kept its earnings streak alive the trailing four quarters that led to an average earnings surprise of +3.9%.
Currently, ICE has a Zacks Rank #3 (Hold), but that could definitely change following its second-quarter earnings report that has just been released. The key takeaways from this immediate announcement are highlighted below:
Earnings: ICE earnings outperformed our expectations. Our consensus called for EPS of $2.77, while the company reported $2.90.
Revenue: Net revenues missed our estimate. Our consensus called for revenues of $809 million, and the company reported revenues of $797 million.
Key Stats to Note: Total operating expenses dipped 13.2% year over year to $367 million in the second-quarter. Operating income improved 31.5% to $430 million.
Total outstanding debt stood at $3.3 billion, marginally higher from 2014-end level.
Overall, ICE returned $288 million through dividends and share repurchases during the quarter.
The company expects adjusted operating expenses in the range of $330-335 million for the third and fourth quarter 2015 respectively.
Check back later for our full write up on this ICE earnings report later!
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