NYSE owner ICE profit beats as volatility drives up trading volumes
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INTERCONTINENTAL Exchange (ICE) beat Wall Street estimates for second-quarter profit on Thursday (Aug 4) as the New York Stock Exchange’s (NYSE) owner benefited from choppy global markets that led to a surge in trading volumes, sending its shares up over 4 per cent.
Investors actively rejigged their portfolios to hedge against potential risks amid rapidly rising rates and decades-high inflation.
The volatility and uncertainty in energy markets triggered by the war in Ukraine drove global gas trading volumes 31 per cent higher so far this year, sparking a 49 per cent growth in the exchange’s North American gas business in the second quarter.
Atlanta-based ICE added that it expects heightened concerns tied to the war and the reshaping of the global energy supply chain to also drive demand for its risk management tools.
“We are well positioned to benefit from both the near-term volatility and the long-term secular growth trends occurring across these markets,” said Benjamin Jackson, ICE’s president, in a call with analysts.
On an adjusted basis, ICE net income rose 12.4 per cent to US$739 million, or US$1.32 per share, in the quarter ended Jun 30. Analysts on average were expecting the company to report a profit of US$1.27 per share, Refinitiv IBES data showed.
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ICE, which runs futures and equities exchanges as well as clearing houses, data services and a mortgage software business, saw revenue from its biggest exchanges segment rise 20 per cent to US$1.6 billion during the quarter.
The results round out an upbeat second-quarter for US exchanges, as market turbulence drove up trading volumes.
Total revenue, excluding transaction-based expenses, came in at US$1.81 billion, above analysts estimates of US$1.80 billion.
Through the quarter, ICE said it repurchased US$632 million of its common stock, and paid US$427 million in dividends to shareholders.
In line with peers, the exchange’s expenses climbed 4.1 per cent to US$945 million, above its previous outlook of US$900-910 million. REUTERS
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