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ICE's First-Quarter Earnings Growth Was Hot

By Dave Kovaleski – Updated May 1, 2020 at 1:40PM

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International Exchange, which owns the New York Stock Exchange among others, also booked record revenue.

On Thursday morning, Intercontinental Exchange (ICE -0.06%) reported record revenue in the first quarter and double-digit percentage earnings growth.

The company, which owns 12 different financial and commodity exchanges, including the New York Stock Exchange, and six clearinghouses, saw revenues increase 23% year over year to $1.6 billion. It also had a record-high operating margin of 57%. Net income was $650 million with diluted earnings per share (EPS) up 38% to $1.17.

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ICE was buoyed by huge numbers in its trading and clearing business segment, which posted $883 million in revenue for the quarter, a 44% increase over the first quarter of 2019. It had record operating income of $573 million with an operating margin of 65%. Among its trading segments, energy futures and options revenue jumped by the highest percentage, 54% to $353 million. Financials revenue rose 48% to $123 million. The data and listings arm had $676 million in revenue in the quarter, up 3% year over year.

"In the first quarter we generated record revenues, record operating income and double-digit earnings-per-share growth, which enabled us to return over $850 million to stockholders through our dividend and stock buyback program," CFO Scott Hill said in the earnings release. "This performance also enabled us to continue to invest in our business, ensuring we can continue to provide our customers with critical risk management tools while also creating value for our stockholders."

Operating expenses in the quarter were $677 million. ICE provided some guidance, forecasting second-quarter operating expenses in a range of $646 million and full-year operating expenses somewhere around $2.6 billion.

The stock opened flat on Friday, and is trading at about $89 per share, down 3% year to date.

Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Intercontinental Exchange. The Motley Fool has a disclosure policy.

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