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Will Intercontinental Exchange (ICE) Beat on Q2 Earnings?

Zacks Equity Research

Intercontinental Exchange, Inc. ICE is slated to report second-quarter 2019 results on Aug 1, before market open. The company delivered positive surprise in the last four reported quarters with the average being 3.23%.

Factors to Consider

Intercontinental Exchange’s second-quarter revenues are likely to benefit from a compelling product and service portfolio along with a broad range of risk management services and strength in global data services and energy franchise. The Zacks Consensus Estimate for revenues is pegged at $1.3 billion, indicating 3.7% increase from the year-ago reported figure.

The company estimates the momentum in data revenue growth to continue. Data revenues are expected between $550 million and $555 million. The company expects higher annual subscription value to support revenues.

In the second quarter, Intercontinental Exchange delivered improved average daily volume.

The company expects the automation of fixed income workflows and growth in passive strategy to drive demand for evaluative pricing services.

Expenses are likely to be on the higher side due to increase in compensation and benefits, acquisition-related transaction and integration as well as technology and communication costs. This, in turn, might restrict margin expansion and hurt the company’s overall performance.

The company estimates second-quarter adjusted expenses to be in the range of $537 million to $547 million, largely due to the full-quarter impact of annual merit increases and equity grants.

The Zacks Consensus Estimate for earnings is pegged at 92 cents, indicating an increase of 2.2% from the prior-year quarter reported figure.

What Our Quantitative Model States

Our proven model shows that Intercontinental Exchange is likely to beat on earnings in the to-be-reported period. This is because the stock has both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).

Earnings ESP: Intercontinental Exchange has an Earnings ESP of +0.36%. This is because the Most Accurate Estimate of 93 cents is higher than the Zacks Consensus Estimate of 92 cents. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Intercontinental Exchange Inc. Price and EPS Surprise

Intercontinental Exchange Inc. Price and EPS Surprise
Intercontinental Exchange Inc. Price and EPS Surprise

Intercontinental Exchange Inc. price-eps-surprise | Intercontinental Exchange Inc. Quote

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Zacks Rank: Intercontinental Exchange carries a Zacks Rank #2, which increases the predictive power of ESP.

We caution against Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Other Stocks to Consider

Some other stocks worth considering from the finance sector with the perfect mix of elements to surpass estimates this time around are as follows:

Lincoln National LNC, set to report second-quarter earnings on Jul 31, has an Earnings ESP of +0.71% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Hartford Financial Services Group HIG is set to report second-quarter earnings on Aug 1. It has an Earnings ESP of +0.54% and a Zacks Rank of 3.

American Financial Group AFG is set to report second-quarter earnings on Aug 6. It has an Earnings ESP of +0.66% and a Zacks Rank of 3.

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Lincoln National Corporation (LNC) : Free Stock Analysis Report
 
The Hartford Financial Services Group, Inc. (HIG) : Free Stock Analysis Report
 
American Financial Group, Inc. (AFG) : Free Stock Analysis Report
 
Intercontinental Exchange Inc. (ICE) : Free Stock Analysis Report
 
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