Will Intercontinental Exchange Pull Off a Surprise in Q3 Earnings?
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Intercontinental Exchange Inc. ICE is slated to report third-quarter 2024 earnings on Oct. 31, before market open. ICE delivered an earnings surprise in three of the last four quarters while matching estimates in one, the average beat being 2.35%.
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Factors to Note
Continued strong trends across fixed-income data and analytics and an acceleration in growth in other data and network services businesses are likely to have aided the third-quarter performance of Intercontinental Exchange. The Zacks Consensus Estimate for revenues is pegged at $2.35 billion, indicating an increase of 17.2% from the year-ago reported number.
Fixed Income and Data Services revenues are likely to have benefited from higher corporate and municipal bond activity, growth in pricing and reference data business and strength in index business, growth in ICE Global Network offering, coupled with strength in consolidated feeds and desktop revenues.
Our estimate is pegged at $604.9 million. The Zacks Consensus Estimate for the metric is pegged at $593 million, indicating an increase of 6% from the year-ago reported figure.
The Exchange segment is likely to have benefited from higher transaction revenues, driven by an increase in interest rate business, solid energy revenues and a rise in commodities volume as well as financials volume. The Zacks Consensus Estimate for the segment’s revenues is pegged at $1.6 billion, indicating an increase of 4.1% from the year-ago reported figure. We expect the metric to be $1.2 billion.
The Mortgage Technology segment’s revenues are expected to have gained from the Black Knight acquisition, higher origination technology revenues, increased market share and continued adoption of digital solutions as well as revenue contribution from Black Knight. The Zacks Consensus Estimate for the segment’s revenues is pegged at $515 million, indicating an increase of 56% from the year-ago reported figure. We expect the metric to be $522.3 million.
Expenses are likely to have increased owing to higher compensation and benefits, professional expense, acquisition-related transaction costs, and technology and communication. We estimate expenses to increase 19.4% to $969.5 million.
For the third quarter of 2024, GAAP operating expenses are expected in the range of $1.22-$1.23 billion. Adjusted operating expenses are projected to be between $955 million and $965 million. GAAP non-operating expense is anticipated between $200 million and $205 million. Adjusted non-operating expense is anticipated in the range of $190-$195 million.
The Zacks Consensus Estimate for earnings is pegged at $1.55 per share, indicating an increase of 6.1% from the prior-year quarter’s reported figure.
ICE reported a 28% increase in third-quarter average daily volume (ADV). Total Natural Gas ADV was up 33% year over year, while Energy ADV increased 23% year over year. Total Environmental ADV improved 52% year over year.
