What to Expect From Intercontinental (ICE) in Q4 Earnings?
Intercontinental Exchange Inc. ICE is slated to report fourth-quarter 2023 earnings on Feb 8, before market open. ICE delivered earnings surprise in each of the three reported quarters of 2023.
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 $2.2 billion, up 22.7% from the year-ago reported number.
Strength across desktop, derivatives analytics and feed offerings is likely to have favored Fixed Income and Data Services business. The Zacks Consensus Estimate for the segment’s revenues is pegged at $559 million, indicating a 4.1% increase from the year-ago reported figure. We expect the metric to be $567 million.
The Exchange segment is likely to have benefited from higher transaction revenues, an increase in listings, growth in agricultural commodities and equity derivatives business. An 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 $1.4 billion. We expect the metric to be $1.1 billion.
ICE estimates fourth-quarter OTC and other revenues in the range of $70-$75 million.
The Mortgage Technology segment’s revenues are likely to have been benefited from accretion from the Black Knight acquisition and higher sales. The Zacks Consensus Estimate for the segment’s revenues is pegged at $503 million, indicating a 102% increase from the year-ago reported figure. We expect the metric to be $519million.
Expenses are likely to have increased given several strategic initiatives including product launches, technology upgrade as well as higher debt and integration expenses, capital and infrastructural costs, rebates, and compensation and benefits expenses.
ICE expects 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 as well as full-quarter expenses related to Black Knight. GAAP non-operating expense is expected in the range of $240-$245 million. Adjusted non-operating expense is expected in the range of $225-$230 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, indicating a decrease of 3.2% from the prior-year quarter’s reported figure.
ICE reported a 26% increase in fourth-quarter average daily volume (ADV). Total Natural Gas ADV was up 16%. Total Agricultural & Metals ADV increased 16% and total Financials ADV was 17% year over year.
What the Zacks Model Says
Our proven model does not conclusively predict an earnings beat for Intercontinental 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. This is not the case as you can see below.
Earnings ESP: Intercontinental has an Earnings ESP of 0.00%. This is because both the Zacks Consensus Estimate and the Most Accurate Estimate is pegged at $1.29. 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 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 come up with 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.
CME’s earnings beat estimates in each of the last four quarters.
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.
COIN’s earnings beat estimates in three of the four trailing quarters while missed in one.
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.
ACGL’s earnings beat estimates in three of the last four quarters and missed once.
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
