Will Intercontinental Exchange Pull Off a Surprise in Q1 Earnings?

Intercontinental Exchange Inc. ICE is expected to register an improvement in its top and bottom lines when it reports first-quarter 2025 results on May 1, before market open.

The Zacks Consensus Estimate for ICE’s first-quarter revenues is pegged at $2.46 billion, indicating 7.4% growth from the year-ago reported figure.

The consensus estimate for earnings is pegged at $1.70 per share. The Zacks Consensus Estimate for ICE’s first-quarter earnings has moved up 2.4% in the past 30 days. The estimate suggests a year-over-year increase of 14.8%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

What the Zacks Model Unveils for ICE

Our proven model predicts an earnings beat for Intercontinental Exchange this time around. This is because the stock has the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) that increases the chances of an earnings beat.

Earnings ESP: Intercontinental Exchange has an Earnings ESP of +0.51%. You can uncover the best stocks to buy or sell before they’re 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: ICE carries a Zacks Rank #2 at present.

Factors Likely to Shape Q1 Results of ICE

Continued strong trends across fixed-income data and analytics and an acceleration in growth in other data and network services businesses are likely to have aided the first-quarter performance of Intercontinental Exchange. 

Fixed Income and Data Services revenues are likely to have benefited from growth in pricing and reference data business and strength in index business, growth in ICE Global Network offering, coupled with strength in consolidated feeds and desktop revenues. The Zacks Consensus Estimate is pegged at $603 million, while our estimate is pinned at $618.9 million.

The Exchange segment is likely to have benefited from a strong retention rate of existing customers, the addition of new customers and increased purchases by existing customers, increased participation in U.S. equity markets, interest rate volatility and divergence of rate paths by central banks. The company expects the Data and Connectivity Services revenues will rebound to the $240 million to $245 million range in the first quarter of 2025. The Zacks Consensus Estimate is pinned at $1.9 billion, while our estimate for the same is pegged at $1.2 billion. 

The Mortgage Technology segment’s revenues are expected to have gained from increased market share and continued adoption of digital solutions, incremental origination technology revenue and servicing software revenues contributed by Black Knight following the completion of the acquisition in September 2023. The Zacks Consensus Estimate for the segment’s revenues is pegged at $512 million. We expect the metric to be $541.3 million.

Expenses are likely to have increased owing to higher compensation and benefits, professional expenses, acquisition-related transaction costs, and technology and communication. We estimate expenses to increase 4.5% to $971.6 million.

For the first quarter of 2024, GAAP operating expenses are expected in the range of $1.22-$1.23 billion. Adjusted operating expenses are projected to be between $965 million and $975 million. Non-operating expense is anticipated to be between $175 million and $185 million.
Continued share buybacks are likely to have added to the upside.

ICE reported a 23% increase in first-quarter average daily volume (ADV). Total Natural Gas ADV was up 33% year over year, while Energy ADV increased 24% year over year. Total Financials ADV increased 28% in the fourth quarter.

Other Stocks to Consider

Here are some other finance stocks you may want to consider, as our model shows that these, too, have the right combination of elements to post an earnings beat:

Cboe Global Markets, Inc. CBOE has an Earnings ESP of +0.80% and a Zacks Rank of 2 at present. The Zacks Consensus Estimate for first-quarter 2025 earnings is pegged at $2.34, indicating an increase of 8.8% from the year-ago reported figure. You can see the complete list of today’s Zacks #1 Rank stocks here.

CBOE’s earnings beat estimates in three of the last four reported quarters and missed in one.

Assurant, Inc. AIZ has an Earnings ESP of +1.53% and a Zacks Rank of 3 at present. The Zacks Consensus Estimate for first-quarter 2025 earnings is pegged at $3, indicating a decrease of 37.2% from the year-ago reported figure. 

AIZ’s earnings beat estimates in each of the last four quarters.

Lemonade, Inc. LMND has an Earnings ESP of +3.40% and a Zacks Rank of 3 at present. The Zacks Consensus Estimate for first-quarter 2025 earnings is pegged at a loss of 94 cents, indicating a decline of 40.3% from the year-ago reported figure. 

LMND’s earnings beat estimates in each of the last four quarters.

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This article originally published on Zacks Investment Research (zacks.com).

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