For Immediate Release
Chicago, IL – September 07, 2012 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include IntercontinentalExchange Inc. (ICE), NYSE Euronext Inc. (NYX), CME Group Inc. (CME), Peabody Energy Corporation (BTU) and CONSOL Energy Inc. (CNX).
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Here are highlights from Thursday’s Analyst Blog:
ICE Scores WhenTech
In an attempt to enhance its technology space, IntercontinentalExchange Inc. (ICE) announced the acquisition of WhenTech – a prominent technology, software and information supplier for the options market. Financial and other details of the deal remain undisclosed.
The acquisition will enable ICE to offer superior options trading by assimilating its option services with WhenTech’s pricing and risk management proficiencies, which leads in the US market. Consequently, traders at ICE will now be able to ascertain option trading occasions more quickly and efficiently enjoy smooth execution of such trades.
This is not the first time that ICE has been associated with WhenTech. The company’s subsidiary YellowJacket’s trading relationship with WhenTech dates back to May 2012, whereby ICE Chat platform was established to swiftly detect options opportunities in the market and relay those messages instantly. Such processes have resulted in effective and attainment of timely request, execution and order fulfilment for cross-trading transactions.
Hence, based on a successful and productive past performance, we believe the acquisition should further help ICE achieve its goal of providing the best technology experience to customers. Moreover, given the fact that sluggish transaction volumes have been deteriorating the growth prospects across the exchange industry; building and capitalizing on the market data, technology and other revenues appears to be a viable channelization of resources for ICE.
Moreover, the outlay of growth plan earlier this year -- by dominant players such as NYSE Euronext Inc. (NYX) and CME Group Inc. (CME) through acquisitions, setting up of clearinghouses along with new product and service initiations in the derivatives market -- have already pointed out the swiftly changing dynamics of the exchange industry. Such aggressive industry efforts are not only keeping the company’s management on its toes but are also directly threatening its operating and competitive leverage.
Early Transition of Energy Swaps
In order to remain competent in the market, ICE plans to convert its over-the-counter (:OTC) cleared energy swaps and options to futures by mid-October this year, ahead of the prior schedule of January 2013. The before-schedule transition is based on the heightened interest of the customers.
Accordingly, ICE intends to list its cleared North American natural gas, electric power and environmental-based contracts on the ICE Futures U.S. energy division. Meanwhile, the futures list on ICE Futures Europe will now include cleared oil products, freight, iron ore and natural gas liquid swaps.
Peabody Halts Coal Operation
Peabody Energy Corporation (BTU) has announced that it will permanently discontinue coal production at its Air Quality Mine in Vincennes, Indiana, due to weak market conditions.
To continue with its mine shut down process, Peabody plans to circulate Worker Adjustment and Retraining Notification (“WARN”) letters to its 230 employees. This letter will include a plan of 60-day period for a job transition. Peabody will also create placement opportunities for the existing employees at other projects.
As a result of this action, Peabody expects to incur $75 million one-time non-cash after tax charges at the end of third-quarter 2012.
We view Peabody’s planned production curtailment program as a good move with respect to present coal consumption trend. During second-quarter earnings, the company projected full-year 2012 total U.S. coal demand to decline by 100 to 120 million tons, due to lower coal-fueled electricity generation resulting from a sluggish economy and low natural gas prices.
In addition, this measure will enable Peabody to curtail its operating costs, which in turn will help the company to improve its financial performance.
Peabody’s peer CONSOL Energy Inc. (CNX) pursued the same strategy and temporarily stalled operations at its Buchanan Mine in southwestern Virginia owing to soft coal market conditions.
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