In This Article:
A month has gone by since the last earnings report for IntercontinentalExchange (ICE). Shares have added about 11.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is ICE due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Intercontinental Exchange Q2 Earnings & Revenues Top
Intercontinental Exchange reported second-quarter 2019 adjusted earnings per share of $1.07, which beat the Zacks Consensus Estimate by 2.9%. Also, the bottom line improved 13.8% on a year-over-year basis.
The company witnessed continued revenue growth driven by strong Trading and Clearing as well as Data and Listings.
Performance in Detail
Intercontinental Exchange’s revenues of $1.4 billion increased 7.5% year over year on higher revenues from transaction and clearing, data services, listings and other revenues. Moreover, the top line outpaced the Zacks Consensus Estimate by 0.5%.
Net revenues of Trading and Clearing segment were $710 million, up 12% year over year, while Data and Listings revenues were $685 million, up 3% year over year
Total operating expenses rose 5.3% year over year to $651 million, primarily due to higher compensation and professional services, technology and communication expenses, rent and occupancy and acquisition-related transaction and integration costs. Adjusted operating expenses were $575 million in the second quarter, up 6.5% from the year-ago quarter’s figure.
Adjusted operating income improved 8.2% year over year to $820 million. Adjusted operating margin expanded 100 basis points (bps) from the year-ago quarter to 59%.
Trading and Clearing's adjusted operating income of $545 million was up 11.3% year over year. Adjusted operating margin contracted 100 bps. Data and Listings' adjusted operating income rose 4.6% year over year to $366 million and adjusted operating margin of 53% was flat year over year.
Total Futures & Options totaled 5.6 million contracts, flat year over year. Revenue per contract of $1.17 increased 2% year over year.
Financial Update
As of Jun 30, 2020, Intercontinental Exchange had cash and cash equivalents of $1.873 billion, up nearly 5% from the level as of Dec 31, 2019. Long-term debt of $7.7 billion was up 46.7% from 2019-end level.
Total equity was $16.9 billion as of Jun 30, 2010, down 1.8% from 2019 end.
Operating cash flow was $1.4 billion in the first half of 2020, down 0.3% year over year. Free cash flow was $1.1 billion, up 10.9% year over year.
In the first half of 2020, the company returned $1.4 billion to its shareholders.