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A month has gone by since the last earnings report for IntercontinentalExchange (ICE). Shares have added about 3.6% 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.
Interconinental Exchange Q1 Earnings Beat Estimates
Intercontinental Exchange, Inc. 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.
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.