What's in Store for Intercontinental (ICE) in Q3 Earnings?
Intercontinental Exchange Inc. ICE is slated to report third-quarter 2023 earnings on Nov 2, before market open. ICE delivered an earnings surprise in three of the last four quarters and missed in one, the average being 2.07%.
Factors to Note
Solid performance at the 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 $2.01 billion, up 11% from the year-ago reported number.
Increased activity as a result of continued interest rate volatility, higher net interest income on collateral balances, strength in index business and growth in ICE Global Network offering, coupled with a rise in desktop, feeds and derivatives analytics revenues, are likely to have aided Fixed Income and Data Services. The Zacks Consensus Estimate for the segment’s revenues is pegged at $561 million, indicating a 5% increase from the year-ago reported figure. We expect the metric to be $560 million.
The Exchange segment is likely to have benefited from higher transaction revenues, an increase in listings and 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 $1.5 billion. We expect the metric to be $1 billion.
The Mortgage Technology segment’s revenues are likely to have been affected by lower mortgage origination volumes due to rising interest rates, reduced transaction-based revenues as mortgage origination volumes declined and decreased professional services related to fewer new customer implementations. The Zacks Consensus Estimate for the segment’s revenues is pegged at $326 million, indicating an 18% decline from the year-ago reported figure. We expect the metric to be $259 million.
Expenses are likely to have decreased because of lower compensation and benefits, professional services, acquisition-related transaction and integration costs, technology and communication.
ICE expects the third quarter of 2023 GAAP operating expenses in the range of $910-$920 million. Adjusted operating expenses are expected in the range of $760-$770 million. GAAP non-operating expense is expected in the band of $80-$85 million. Adjusted non-operating expense is expected between $70 million and $75 million.
The Zacks Consensus Estimate for earnings is pegged at $1.40 per share, indicating an increase of 6.87% from the prior-year quarter’s reported figure.
ICE reported an 8% increase in third-quarter average daily volume (ADV). Total Natural Gas ADV was up 15%. Total Agricultural & Metals ADV increased 7% and total Financials ADV lost 13%.
What the Zacks Model Says
Our proven model does not conclusively predict an earnings beat for Intercontinental Exchange this time around. This is because the stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for an earnings beat. This is not the case as you can see below.
Earnings ESP: Intercontinental Exchange has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are both pegged at $1.40. 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.
Stocks to Consider
Some finance stocks with the right combination of elements to come up with an earnings beat this time around are:
Cboe Global Markets, Inc. CBOE has an Earnings ESP of +0.71% and a Zacks Rank of 2 at present. The Zacks Consensus Estimate for third-quarter 2023 earnings is pegged at $1.84 per share, indicating an increase of 5.7% from the year-ago reported figure. You can see the complete list of today’s Zacks #1 Rank stocks here.
CBOE’s earnings beat estimates in each of the last four quarters.
American Equity Investment Life Holding Company AEL currently has an Earnings ESP of +1.44% and a Zacks Rank of 3. The Zacks Consensus Estimate for third-quarter 2023 earnings is pegged at $1.67, indicating an increase of 68.6% from the year-ago reported figure.
AEL’s earnings beat estimates in two of the last four reported quarters and missed in the other two.
Brighthouse Financial, Inc. BHF currently has an Earnings ESP of +0.10% and a Zacks Rank of 3. The Zacks Consensus Estimate for third-quarter 2023 earnings is pegged at $4.03, indicating an increase of 10.175% from the year-ago reported figure.
BHF’s earnings beat estimates in two of the last four reported quarters and missed in the other two.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Intercontinental Exchange Inc. (ICE) : Free Stock Analysis Report
Cboe Global Markets, Inc. (CBOE) : Free Stock Analysis Report
American Equity Investment Life Holding Company (AEL) : Free Stock Analysis Report
Brighthouse Financial, Inc. (BHF) : Free Stock Analysis Report
