IntercontinentalExchange Earnings: Revenue Slips, Net Income Declines

S&P 500 (NYSE:SPY) component IntercontinentalExchange Inc. (NYSE:ICE) reported its results for the third quarter. IntercontinentalExchange operates the electronic futures and OTC marketplace for the trading of energy, soft agricultural commodities, credit default swaps and other financial products.

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IntercontinentalExchange Inc. Earnings Cheat Sheet

Results: Net income for IntercontinentalExchange Inc. fell to $131.1 million ($1.79 per share) vs. $132.6 million ($1.80 per share) a year earlier. This is a decline of 1.2% from the year-earlier quarter.

Revenue: Fell 5.2% to $323.2 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: IntercontinentalExchange Inc. beat the mean analyst estimate of $1.72 per share. It fell short of the average revenue estimate of $361.9 million.

Quoting Management: Said ICE Chairman and CEO Jeffrey C. Sprecher: “ICE remains at the forefront of solutions for financial reform as evidenced by our successful and timely transition from OTC energy swaps contracts to fully regulated futures on October 15th. This transition required significant planning and effort and I am proud that the ICE team achieved this significant move for our customers on schedule, while positioning ICE to pursue additional growth opportunities. We also continue to enhance our leadership in clearing and post-trade services for the OTC markets, and remain focused on delivering sector-leading growth by leveraging our global markets infrastructure, along with our drive to innovate.”

Key Stats:

Last quarter’s profit decreases breaks a four-quarter run of profit increases. In the second quarter, net income rose 18% from the year earlier, while the figure increased 14.7% in the first quarter, 27.9% in the fourth quarter of the last fiscal year and 37.7% in the third quarter of the last fiscal year.

A year-over-year revenue decrease last quarter snaps a streak of four consecutive quarters of revenue increases. The best quarter in that span was the third quarter of the last fiscal year, which saw revenue rise 18.7%.

The company has beaten estiamtes for two quarters in a row. In the second quarter, it topped expectations with net income of $1.95 versus a mean estimate of net income of $1.93 per share.

Looking Forward: Over the past ninety days, the average estimate for the fourth quarter has fallen from $1.94 per share to $1.86, indicating that analysts are growing pessisimistic about the company’s performance next quarter. The average estimate for the fiscal year is $7.57 per share, down from $7.82 ninety days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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