Intercontinental Exchange Inc. ICE is about to unveil its fourth-quarter 2023 earnings on Feb 8, before the market opens. The company has significantly surprised with its earnings results in the past three quarters of 2023.
Factors to Note
The company’s robust performance in its Exchanges, and Fixed Income and Data Services segments is expected to have been a substantial impetus to the revenues in the upcoming quarter. The Zacks Consensus Estimate for revenues is projected at $2.2 billion, reflecting a notable 22.7% surge from the figures reported a year ago.
The Fixed Income and Data Services business are likely to have received a lift from the strong demand for its desktop, derivatives analytics, and feed offerings. The segment’s revenues are estimated to hit $559 million, signifying a 4.1% surge from the figures reported in the previous year.
In the Exchange segment, an upturn in transaction revenues, an increase in listings, and growth in agricultural commodities and equity derivatives business are expected to have driven revenues. Moreover, growth in interest rate business, equity derivatives, and global natural gas revenues are also anticipated to contribute to the upward trend. The segment’s revenues are estimated at $1.4 billion.
ICE forecasts fourth-quarter OTC and other revenues to range between $70-$75 million. The Mortgage Technology segment’s revenues are projected to have been bolstered by the accretion from the Black Knight acquisition and stronger sales, with the Zacks Consensus Estimate at $503 million.
However, it is likely that expenses have surged due to various strategic initiatives, including product launches, technology upgrades, higher debt and integration costs, capital and infrastructural expenses, rebates, and compensation and benefits costs.
ICE anticipates fourth-quarter 2023 GAAP operating expenses in the range of $1.21-$1.22 billion. Adjusted operating expenses are expected in the range of $955-$965 million due to additional rent, D&A and seasonality, and capitalized labor expenses. Non-operating expenses are estimated in the range of $240-$245 million, largely caused by the full-quarter impact of acquisition-related interest expense.
The Zacks Consensus Estimate for earnings is pegged at $1.29 per share, signaling a decrease of 3.2% from the prior-year quarter’s reported figure. ICE has reported a 26% increase in fourth-quarter average daily volume (ADV), indicating a strong performance across various segments.
What the Zacks Model Says
Our proven model doesn’t conclusively predict an earnings beat for Intercontinental this time around. The combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This formula doesn’t seem to apply here, as illustrated below.
Earnings ESP: Intercontinental has an Earnings ESP of 0.00%. This is because both the Zacks Consensus Estimate and the Most Accurate Estimate are pegged at $1.29.
Intercontinental Exchange Inc. Price and EPS Surprise
Intercontinental Exchange Inc. price-eps-surprise | Intercontinental Exchange Inc. Quote
Zacks Rank: ICE currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks to Consider
Here are some finance stocks with the right combination of elements to potentially record an earnings beat this time around.
CME Group CME has an Earnings ESP of +0.10% and a Zacks Rank of 2. The Zacks Consensus Estimate for CME’s fourth-quarter 2023 earnings is pegged at $2.27 per share, indicating an increase of 18.2% from the year-ago reported figure.
Coinbase Global COIN has an Earnings ESP of +166.67% and a Zacks Rank of 3. The Zacks Consensus Estimate is pegged at a loss of 6 cents per share for COIN for fourth-quarter 2023, lower than the year-ago loss of $2.46.
Arch Capital Group ACGL has an Earnings ESP of +1.24% and a Zacks Rank of 3. The Zacks Consensus Estimate for ACGL’s fourth-quarter 2023 earnings is pegged at $1.94 per share, indicating a decrease of 9.4% from the year-ago reported figure.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Intercontinental Exchange Inc. (ICE) : Free Stock Analysis Report
CME Group Inc. (CME) : Free Stock Analysis Report
Arch Capital Group Ltd. (ACGL) : Free Stock Analysis Report
Coinbase Global, Inc. (COIN) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
