ICE earnings up 17% year on year

Intercontinental Exchange (NYSE:ICE) has reported financial results for the second quarter of 2017. For the quarter ended June 30, 2017, consolidated net income attributable to ICE was $418 million on $1.2 billion of consolidated revenues less transaction-based expenses. Second quarter GAAP diluted earnings per share (EPS) were $0.70, up 17% year-over-year. On an adjusted basis, net income was $448 million in the second quarter, and diluted EPS were $0.75, up 9% year-over-year. Please refer to the reconciliation of non-GAAP financial measures included in the press release for more information on our adjusted net income and adjusted diluted EPS.

“Our record second quarter performance resulted in our seventeenth consecutive quarter of revenue growth,” said ICE Chairman and CEO Jeffrey C. Sprecher. “This was driven by strength in both our data and listings and our trading and clearing segments, demonstrating the ability of our integrated business model to capture opportunities across global markets. We are focused on expanding our comprehensive trading, data and risk management solutions for our customers and creating strong value for shareholders.”

Scott A. Hill, ICE CFO, added: “In the second quarter, we built on our track record of consistent revenue growth, expense discipline and margin expansion. This performance generated strong cash flows which allowed us to return over $700 million to shareholders in the first half of 2017 and has us on track to return around $1.4 billion this year. We are well positioned to achieve our growth objectives in 2017 and are investing to strengthen the foundation for continued growth in the future.”

Second Quarter 2017 GAAP Results

Second quarter 2017 consolidated revenues, less transaction-based expenses, were $1.2 billion. Trading and clearing segment revenues, less transaction-based expenses, were $550 million in the second quarter 2017, up 4% compared to the prior second quarter. Data and listings segment revenues were $628 million in the second quarter of 2017, up 4% compared to the prior second quarter, including data services revenues of $521 million, up 5% and listings revenues of $107 million, up 2% over the prior second quarter.

Consolidated operating expenses were $569 million for the second quarter of 2017. Consolidated operating income for the second quarter was $609 million and operating margin was 52%. The effective tax rate for the second quarter was 25%.

Unrestricted cash was $398 million and outstanding debt was $5.9 billion as of June 30, 2017.

Financial Guidance

  • ICE’s third quarter 2017 GAAP operating expenses are expected to be in a range of $545 millionto $555 million and adjusted operating expenses(1) are expected to be in a range of $480 million to $490 million.
  • ICE’s interest expense is expected to be $47 million in the third quarter and $49 million in the fourth quarter, including the effect of refinancing ICE’s October bond maturity.
  • ICE’s adjusted effective tax rate is expected to be approximately 31% for the third quarter.
  • ICE’s diluted share count for the third quarter is expected to be in the range of 590 million to 595 million weighted average shares outstanding.

(1) The 2017 Non-GAAP adjusted operating expense excludes $67 million in amortization of acquisition-related intangibles for the third quarter of 2017. The GAAP operating expense forecast does not reflect an estimate of acquisition-related transaction and integration costs for the third quarter of 2017.