Intercontinental Exchange Notches Up Record Volumes in Q1

Intercontinental Exchange, Inc. ICE has grossed record average daily volume (ADV) for the first quarter of 2018.  While both total Futures and Commodities ADV rose 4% each, Energy futures ADV increased 3%.

Agriculture & Metals futures ADV shot up 18% year over year in the first quarter, fueled by a record Sugar futures ADV with 17% rise, 20% increase in Cocoa ADV and a 23% expansion in Cotton futures ADV.

Increase of 9% in Interest Rate futures ADV was driven by a record Sterling ADV, rising 20% year over year. While equity ADV gained 9%, equity options surged 62% year over year.

Volumes in the first quarter were driven by better numbers in January and February. Soft volumes in March were a partial offset.

Total Futures and Options volume in March declined 11.3% to 5.9 million contracts. A 1.5% lower Commodities ADV and 19.6% lower Financials ADV were responsible for the downside. Revenues per contract were 13 cents for March, down 38.5% year over year.

Revenues per contract were 13 cents for March 2018, down 38.5% year over year.

Recently, securities exchanges, namely CBOE Holdings Inc. CBOE, CME Group Inc. CME and MarketAxess Holdings Ltd. MKTX also posted respective volumes.

CBOE Global Markets’ March ADV of 8.5 million contracts contracted about 18% year over year while CME Group’s ADV of 20.8 million contracts per day improved 23% year over year. MarketAxess has reported a trading volume of $152.3 billion for March 2018.

Intercontinental Exchange is scheduled to report first-quarter 2018 results before the market opens on May 3. The Zacks Consensus Estimate for quarterly earnings is pegged at 88 cents on revenues of $1.2 billion, reflecting 18.9% and 4.6% year-over-year growth, respectively.

Our proven model does not conclusively show that the company is likely to deliver a positive surprise. This is because although the stock’s favorable Zacks Rank #3 (Hold) increases the predictive power of ESP, its Earnings ESP of -1.36% leaves surprise prediction inconclusive as a company needs a positive ESP to be confident about an earnings surprise.

Shares of Intercontinental Exchange have underperformed the industry  in a year. The stock has gained 3.2%, lagging the industry’s increase of 5.6%.

 

Nonetheless, we believe that the company’s compelling product portfolio, risk management services, prudent acquisitions, timely achievement of cost synergies, strategic initiatives and a solid capital position should drive the shares higher and strengthen its growth profile as well.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Intercontinental Exchange Inc. (ICE) : Free Stock Analysis Report
 
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