Will Intercontinental Exchange (ICE) Q2 Earnings Surprise? - Analyst Blog
Global exchange operator Intercontinental Exchange Inc. ICE is scheduled to release second-quarter 2015 financial results before the opening bell on Aug 5, 2015. In the last reported quarter, the company delivered a positive earnings surprise of 2.68%. Let us see how things are shaping up for this announcement.
Factors Affecting the Past Quarter
Realization of cost synergies and improved operating leverage are likely to boost Intercontinental Exchange’s bottom line. Moreover, the company has been consistently reducing its share count via share buy backs. Additionally, successful acquisitions and integrations have been making way for more revenue generation. These factors, along with extensive global expansions, are therefore expected to contribute positively to earnings.
The New York Stock Exchange – a unit of Intercontinental Exchange – launched NYSE Bitcoin Index or NYXBT during the quarter. With this, the customers will be able to buy and sell cryptocurrencies and other digital assets. This will result in an increase in the top line, which, in turn, will improve the earnings.
However, volatility in Intercontinental Exchange’s trading volumes raises caution. The securities exchange has been experiencing a declining trend in the futures volumes for quite some time and the period between April and June was no exception. Moreover, the average daily equity derivative volumes have also been showing a fluctuating trend. Additionally, stiff competition, currency fluctuations and challenging regulations are other dampeners.
Earnings Whispers
Our proven model does not conclusively show that Intercontinental Exchange is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Zacks ESP: ICE has an Earnings ESP of 0.00%. That is because both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $2.77.
Zacks Rank: ICE has a Zacks Rank #3 (Hold), which increases the predictive power of ESP. However, a 0.00% ESP makes surprise prediction difficult.
We caution against Sell-rated stocks (Zacks Rank #4 and 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies in the finance sector, which you may want to consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Primerica, Inc. PRI with an Earnings ESP of +2.15% and a Zacks Rank #2 (Buy).
American Financial Group Inc. AFG with an Earnings ESP of +6.61% and a Zacks Rank #3.
American Capital, Ltd. ACAS with an Earnings ESP of +8.70% and Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
INTERCONTNTLEXC (ICE): Free Stock Analysis Report
AMER CAP LTD (ACAS): Free Stock Analysis Report
AMER FINL GROUP (AFG): Free Stock Analysis Report
PRIMERICA INC (PRI): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
