Is a Beat in Store for Intercontinental (ICE) in Q2 Earnings?
Intercontinental Exchange Inc. ICE is slated to report second-quarter 2023 earnings on Aug 1, before market open. ICE delivered an earnings surprise in three of the last four quarters and missed in one, the average being 1.76%.
Factors to Note
Solid performance at Exchanges and Fixed Income and Data Services segments is likely to have aided revenues in the to-be-reported quarter. The Zacks Consensus Estimate for revenues is pegged at $1.9 billion, up 3.95% from the year-ago reported number.
Growth in ICE bonds, fixed income data and analytics, network services, CDS clearing business, market volatility, higher interest rates as well as strong growth across desktop, feeds and analytics offerings are likely to have aided Fixed Income and Data Services. The Zacks Consensus Estimate for the segment’s revenues is pegged at $551 million, indicating a 7.6% increase from the year-ago reported figure. We expect the metric to be $544.5 million.
The Exchange segment is likely to have benefited from higher transaction revenues, increase in listings, growth in agricultural commodities and equity derivatives business. Increase in interest rate business, equity derivatives as well as global natural gas revenues are also likely to have added to the upside. The Zacks Consensus Estimate for the segment’s revenues is pegged at $1.1 billion, indicating a 7.6% increase from the year-ago reported figure. We expect the metric to be $1.1 billion.
The Mortgage Technology segment’s revenues are likely to have been affected by lower mortgage origination volumes driven by rising interest rates. The Zacks Consensus Estimate for the segment’s revenues is pegged at $258 million, indicating a 13.1% decrease from the year-ago reported figure. We expect the metric to be $257 million.
Expenses are likely to have decreased because of lower compensation and benefits, professional services, acquisition-related transaction and integration costs, technology and communication, and rent and occupancy.
ICE expects second-quarter 2023 operating expenses in the range of $905-$915 million, while adjusted operating expenses are expected in the range of $763-$773 million. Non-operating expense is expected in the band of $105 million to $110 million. Adjusted non-operating expense is expected in the range of $85-$90 million.
The Zacks Consensus Estimate for earnings is pegged at $1.37 per share, indicating a decrease of 3.8% from the prior-year quarter’s reported figure.
ICE reported a 4% increase in second-quarter average daily volume (ADV). Total Natural Gas ADV was up 3%. Total Agricultural & Metals ADV increased 27% and total Financials ADV lost 13.5%.
What the Zacks Model Says
Our proven model predicts an earnings beat for Intercontinental Exchange this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Earnings ESP: Intercontinental Exchange has an Earnings ESP of +0.47%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
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 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks to Consider
Some other finance stocks with the right combination of elements to come up with an earnings beat this time around are:
Aflac Incorporated AFL has an Earnings ESP of +1.41% and a Zacks Rank of 1. The Zacks Consensus Estimate for Aflac’s second-quarter 2023 earnings is pegged at $1.42 per share, indicating a decrease of 2.7% from the year-ago reported figure.
AFL’s earnings beat estimates in the last four quarters.
Lincoln National LNC has an Earnings ESP of +2.93% and a Zacks Rank of 3. The Zacks Consensus Estimate for Lincoln National’s second-quarter 2023 earnings is pegged at $1.92 per share, indicating a decrease of 13.9% from the year-ago reported figure.
LNC’s earnings missed estimates in three of the four trailing quarters while beat in one.
American Equity Investment AEL has an Earnings ESP of +1.12% and a Zacks Rank of 2. The Zacks Consensus Estimate for AEL ’s second-quarter 2023 earnings is pegged at $1.65 per share, indicating an increase of 68.3% from the year-ago reported figure.
AEL’s earnings beat estimates in three of the last four quarters and missed in the one.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Intercontinental Exchange Inc. (ICE) : Free Stock Analysis Report
Lincoln National Corporation (LNC) : Free Stock Analysis Report
Aflac Incorporated (AFL) : Free Stock Analysis Report
American Equity Investment Life Holding Company (AEL) : Free Stock Analysis Report
