Intercontinental Exchange (ICE) Q1 Earnings & Revenues Beat

Intercontinental Exchange, Inc. (NYSE:ICE) reported first-quarter 2019 adjusted earnings per share of 92 cents, beating the Zacks Consensus Estimate of 89 cents by 3.4%. Also, the bottom line improved 2.2% on a year-over-year basis.

On a GAAP basis, net income was 85 cents per share, up 8% year over year.

The company witnessed growth in subscription-based Data & Listings business, which offset muted trading activity.

Intercontinental Exchange Inc. Price, Consensus and EPS Surprise

Intercontinental Exchange Inc. Price, Consensus and EPS Surprise | Intercontinental Exchange Inc. Quote

Performance in Detail

Intercontinental Exchange’s revenues of $1.270 billion increased 4% year over year on higher revenues at transaction and clearing (3%), data services (5%), listings segments (27%) and other revenues (20.8%). Moreover, the top line outpaced the Zacks Consensus Estimate of $1.269 billion.

Total operating expenses rose 5.2% year over year to $605 million, primarily due to higher compensation and professional services. Adjusted operating expenses were $528 million in the first quarter, up nearly 6.9% from the year-ago quarter’s figure.

Adjusted operating income improved 1.5% year over year to $742 million. Adjusted operating margin was 58%, down 200 basis points from the year-ago quarter.

Trading and Clearing's adjusted operating income of $408 million grew 0.7% year over year while adjusted operating margin contracted 100 basis points. Data and Listings' adjusted operating income rose 2.5% year over year to $334 million while adjusted operating margin of 51% contracted 100 basis points.

Financial Update

As of Mar 31, 2019, Intercontinental Exchange had cash and cash equivalents of $1.5 billion, down 1.4% from the level as of Dec 31, 2018. Long-term debt of $6.5 billion was up 0.03% from 2018-end level.

Total equity was $17.1 billion as of Mar 31, 2019, up 0.6% from $16.9 billion as of Dec 31, 2018.

Operating cash flow was $654 million, up 14% year over year. Free cash flow was $624 million, up 18% year over year.

Share Repurchase and Dividend Update

In the quarter, the company bought back shares worth $440 million and paid dividends amounting to $157 million.

Second-Quarter 2019 Guidance

Data revenues are estimated between $550 million and $555 million.

Operating expenses are projected in the range of $615-$625 million. Adjusted operating expenses are expected to be in the range of $537 million to $547 million.

The company expects interest expense of $71 million in the period.

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

2019 Outlook

Operating expenses are predicted in the band of $2.46-$2.49 billion. Adjusted operating expenses are expected to be in the range of $2.15 million to $2.18 million.

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

Other players from the same industry that have already reported first-quarter results include Nasdaq, Inc. (NASDAQ:NDAQ) , CME Group Inc. (NASDAQ:CME) and MarketAxess Holdings Inc. (NASDAQ:MKTX) . All the three companies beat the respective Zacks Consensus Estimate for earnings.

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