NYSE-parent ICE beats first-quarter profit estimates on robust trading volume

By Prakhar Srivastava

(Reuters) -Intercontinental Exchange beat Wall Street estimates for first-quarter profit on Thursday, benefiting from strong trading volumes in energy and options segments.  

Shares of the New York Stock Exchange parent were up 1.2%. 

Global commodity and energy markets have experienced significant volatility due to shifting U.S. trade policies and concerns over the war in Ukraine. Exchanges often benefit from such market turmoil, as it typically drives higher overall trading volume.

ICE’s average daily volume (ADV) for energy trading rose 24% in the first quarter, with gains across segments including oil, gasoil and other crude and refined products. The ADV for natural gas also increased by 33%. 

Revenue from trading in energy-related products jumped 22% to $557 million in the quarter.

"There is a risk that energy trading has reached the peak given the potential peace deal between Russia and Ukraine," Oppenheimer analyst Owen Lau said.

Total revenue from the company’s exchange business, the biggest component of its revenue, was $2.12 billion, compared with $1.73 billion a year earlier.

The company reported adjusted earnings of $995 million, or $1.72 per share. Analysts had expected a profit of $1.70 per share, according to data compiled by LSEG.

IPO BACKLOG 

While hopes for a rebound in the IPO market were high at the start of the year, tariff-related uncertainty and market volatility have rattled companies, forcing many to delay their stock market debuts.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads.

ICE’s listings business remained flat in the first-quarter.

"Delay in IPOs and lack of new listings last year have negatively impacted listing revenue. It will likely continue in the near term until clarity in trade policies," Lau said.

Swedish fintech Klarna and San Francisco fintech Chime were among the companies that paused their IPO plans earlier this month. 

"The backlog for new IPOs remains strong with a variety of companies seeking to raise capital when volatility abates," ICE CFO Warren Gardiner said.

Should you invest $2,000 in ICE right now?

ProPicks AI are 6 model portfolios created by Investing.com which identify the best stocks for investors to buy now. The stocks that made the cut could produce monster returns in the coming years. Is ICE one of them?

Unlock ProPicks AI to find out