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Intercontinental Exchange (ICE) Q3 Earnings Top, Rise Y/Y

Intercontinental Exchange, Inc.ICE delivered third-quarter 2018 adjusted earnings per share of 85 cents, beating the Zacks Consensus Estimate of 80 cents by 6.3%. Also, the bottom line improved 16.4% on a year-over-year basis.

Intercontinental Exchange Inc. Price, Consensus and EPS Surprise

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

The company's performance in the reported quarter represented a strong performance across futures, cash equities, listings and data services business lines, thereby marking the 22nd consecutive quarter of revenue growth on a year-over-year basis.

Apart from reporting record revenues plus earnings, the company was able to generate record operating cash flows. With the current year coming to an end, the company remains committed to its growth initiatives along with value creation.

On a GAAP basis, net income was 79 cents per share, up 25.4% year over year.

Performance in Detail

Intercontinental Exchange's revenues of $1.2 billion increased 4.7% year over year on higher revenues at transaction and clearing, net (0.3%), data services (2.3%), listings segments (6.7%) as well as other revenues (12.9%). Moreover, the top line outpaced the Zacks Consensus Estimate by 0.7%.

Total operating expenses increased 8.7% year over year to $598 million, primarily due to higher compensation and benefits, professional services, acquisition-related transaction and integration costs, technology and communication as well as depreciation and amortization. Adjusted operating expenses were $521 million in the third quarter, up 8.8% from the year-ago quarter's figure.

Adjusted operating income inched up 1.8% year over year to $679 million. Adjusted operating margin was 57%, having contracted 100 basis points.

Trading and Clearing's adjusted operating income of $352 million grew 2.9% year over year while adjusted operating margin contracted 200 basis points. Data and Listings' adjusted operating income nudged up 0.6% year over year to $327 million while adjusted operating margin contracted 100 basis points.

Financial Update

As of Sep 30, 2018, Intercontinental Exchange had cash and cash equivalents of $1.3 billion, up 2.1% from the level as of Dec 31, 2017. Long-term debt of $6.5 billion inched up 52.1% from 2017-end level.

Total equity was $16.85 billion as of Sep 30, 2018, which dipped 0.8% from $16.99 billion as of Dec 31, 2017.

Free cash flow was $1.7 billion in the first nine months of 2018, up 33.3% year over year.

Share Repurchase and Dividend Update

During the third quarter, the company bought back shares worth approximately $1.1 billion. It has nearly $1.5 billion throughout the reported period.

In the quarter under review, the company paid dividends amounting to $417 million.

Zacks Rank

Intercontinental Exchange 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

Among other players from the same industry having already reported third-quarter earnings, the bottom line of Nasdaq, Inc. NDAQ , CME Group Inc. CME and MarketAxess Holdings Inc. MKTX surpassed the respective Zacks Consensus Estimate.

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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.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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