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What's in the Cards for Intercontinental (ICE) in Q3 Earnings?
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Intercontinental Exchange Group (ICE - Free Report) is slated to report third-quarter 2021 results on Oct 28, before market open. The company beat earnings estimates in three of the last four quarters and matched the same once, the average surprise being 2.70%.
Let’s see how things have shaped up for this announcement.
Revenues in the third quarter are likely to have benefited from a better performance at Exchanges, Fixed Income and Data Services, and Mortgage Technology segments. The company estimates consolidated revenues for third-quarter 2021 in the range of $870 million to $885 million. The Zacks Consensus Estimate for revenues is pegged at $1.8 billion, indicating a 24.3% increase from the year-ago reported figure.
Fixed Income and Data Services segment revenues are projected to improve sequentially to a range of $409 million to $414 million.
Continued strength in the pricing and analytics business driven by strong customer demand for the company’s pricing and reference data products, and connectivity offerings are likely to have boosted data revenues.
For the third quarter of 2021, the company estimates recurring revenues from the Exchange segment in the range of $324 million to $329 million, indicating nearly 5% growth year over year. It expects a sequential improvement in listings revenues to be weighed on by lower data fees at the NYSE. The Zacks Consensus Estimate for revenues is pegged at $952 million.
Transaction revenues are expected to have benefited from growth in energy, interest rate and cash equities businesses.
The Mortgage Technology segment revenues are likely to have benefited from new customer growth and increased adoption of digital workflow tools across origination technology, closing solutions, and data and analytics. For third-quarter 2021, the company guided recurring revenues in the Mortgage Technology segment between $137 million and $142 million, indicating around 30% growth year over year on a pro-forma basis.
Other data and network services is expected to have benefited from continued growth in customer demand for both ICE Global Network and consolidated feeds.
Fixed income data and analytics revenues are likely to have benefited from strength in index business and continued growth in pricing and reference data business, fueled by a strong retention rate of existing customers, the addition of new customers, increased purchases by existing customers, and increases in pricing of products. Fixed Income and Data Services segment revenues are projected to improve sequentially to a range of $409 million to $414 million by the company in the third quarter 2021.
Expenses are likely to have increased given an increase in compensation and benefits, professional services, acquisition-related transaction and integration as well as technology and communication costs, rent and occupancy, and selling, general and administrative expenses. The company now expects third-quarter GAAP non-operating expenses to be in the range of $110 million to $115 million. Adjusted non-operating expenses are expected to be in the range of $100 million to $105 million.
The Zacks Consensus Estimate for earnings is pegged at $1.23, indicating an increase of 19.2% from the prior-year quarter reported figure.
Q3 Average Daily Volume
The company reported solid average daily volume (ADV) for the third quarter 2021. The average daily volume of 5.8 million contracts per day increased 17.8% year over year in the third quarter due to higher volumes in Commodities as well as Financials. Agriculture and Metals ADV of 0.4 million contracts increased 0.8%. Energy volume increased 22.8% to 3.1 million contracts per day. Commodities ADV increased 20% to 3.5 million in the third quarter.
Interest rate volume increased 17.9% to 1.9 million contracts per day. Equity Index volume increased 3.3% to 0.4 million contracts. Foreign exchange volume decreased 12.5% to nearly 0.03 million contracts. Financials ADV increased 14.6% to 2.3 million in the third quarter.
What the Zacks Model Says
Our proven model does not conclusively predict 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. That is not the case as you can see below.
Earnings ESP: Intercontinental Exchange has an Earnings ESP of 0.00%. This is because both the Zacks Consensus Estimate and the Most Accurate Estimate are pegged at $1.23. 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
Zacks Rank: Intercontinental Exchange currently carries a Zacks Rank of 2.
Stocks to Consider
Some stocks worth considering from the finance sector with a perfect mix of elements to surpass estimates in their upcoming quarterly releases are as follows:
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What's in the Cards for Intercontinental (ICE) in Q3 Earnings?
Intercontinental Exchange Group (ICE - Free Report) is slated to report third-quarter 2021 results on Oct 28, before market open. The company beat earnings estimates in three of the last four quarters and matched the same once, the average surprise being 2.70%.
Let’s see how things have shaped up for this announcement.
Revenues in the third quarter are likely to have benefited from a better performance at Exchanges, Fixed Income and Data Services, and Mortgage Technology segments. The company estimates consolidated revenues for third-quarter 2021 in the range of $870 million to $885 million. The Zacks Consensus Estimate for revenues is pegged at $1.8 billion, indicating a 24.3% increase from the year-ago reported figure.
Fixed Income and Data Services segment revenues are projected to improve sequentially to a range of $409 million to $414 million.
Continued strength in the pricing and analytics business driven by strong customer demand for the company’s pricing and reference data products, and connectivity offerings are likely to have boosted data revenues.
For the third quarter of 2021, the company estimates recurring revenues from the Exchange segment in the range of $324 million to $329 million, indicating nearly 5% growth year over year. It expects a sequential improvement in listings revenues to be weighed on by lower data fees at the NYSE. The Zacks Consensus Estimate for revenues is pegged at $952 million.
Transaction revenues are expected to have benefited from growth in energy, interest rate and cash equities businesses.
The Mortgage Technology segment revenues are likely to have benefited from new customer growth and increased adoption of digital workflow tools across origination technology, closing solutions, and data and analytics. For third-quarter 2021, the company guided recurring revenues in the Mortgage Technology segment between $137 million and $142 million, indicating around 30% growth year over year on a pro-forma basis.
Other data and network services is expected to have benefited from continued growth in customer demand for both ICE Global Network and consolidated feeds.
Fixed income data and analytics revenues are likely to have benefited from strength in index business and continued growth in pricing and reference data business, fueled by a strong retention rate of existing customers, the addition of new customers, increased purchases by existing customers, and increases in pricing of products. Fixed Income and Data Services segment revenues are projected to improve sequentially to a range of $409 million to $414 million by the company in the third quarter 2021.
Expenses are likely to have increased given an increase in compensation and benefits, professional services, acquisition-related transaction and integration as well as technology and communication costs, rent and occupancy, and selling, general and administrative expenses. The company now expects third-quarter GAAP non-operating expenses to be in the range of $110 million to $115 million. Adjusted non-operating expenses are expected to be in the range of $100 million to $105 million.
The Zacks Consensus Estimate for earnings is pegged at $1.23, indicating an increase of 19.2% from the prior-year quarter reported figure.
Q3 Average Daily Volume
The company reported solid average daily volume (ADV) for the third quarter 2021. The average daily volume of 5.8 million contracts per day increased 17.8% year over year in the third quarter due to higher volumes in Commodities as well as Financials. Agriculture and Metals ADV of 0.4 million contracts increased 0.8%. Energy volume increased 22.8% to 3.1 million contracts per day. Commodities ADV increased 20% to 3.5 million in the third quarter.
Interest rate volume increased 17.9% to 1.9 million contracts per day. Equity Index volume increased 3.3% to 0.4 million contracts. Foreign exchange volume decreased 12.5% to nearly 0.03 million contracts. Financials ADV increased 14.6% to 2.3 million in the third quarter.
What the Zacks Model Says
Our proven model does not conclusively predict 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. That is not the case as you can see below.
Earnings ESP: Intercontinental Exchange has an Earnings ESP of 0.00%. This is because both the Zacks Consensus Estimate and the Most Accurate Estimate are pegged at $1.23. 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: Intercontinental Exchange currently carries a Zacks Rank of 2.
Stocks to Consider
Some stocks worth considering from the finance sector with a perfect mix of elements to surpass estimates in their upcoming quarterly releases are as follows:
Moody's Corporation (MCO - Free Report) has an Earnings ESP of +0.94% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Equity Residential ((EQR - Free Report) ) has an Earnings ESP of +1.19% and a Zacks Rank of 3, at present.
Capital One Financial (COF - Free Report) has an Earnings ESP of +4.66% and a Zacks Rank #2.