NYSE parent ICE beats estimates but shares fall on mortgage unit outlook
Reuters
Published Aug 03, 2023 07:42AM ET
Updated Aug 03, 2023 01:48PM ET
By Pritam Biswas and Laura Matthews
(Reuters) - Intercontinental Exchange (NYSE:ICE) on Thursday reported second-quarter profit above Wall Street estimates as higher trading volumes at the New York Stock Exchange parent more than offset weakness in its mortgage technology unit, whose weak outlook weighed on shares.
Revenue from ICE's exchanges segment, its biggest business, rose 9% to $1.09 billion from a year earlier, while the company's mortgage technology segment saw a slump of 16% to $249 million.
Warren Gardiner, chief financial officer, told analysts on a call that recurring revenues helped the mortgage unit, which helps businesses originate, review and process mortgages, to outperform an industry experiencing nearly 40% decline in origination volumes.
However, he added "current cyclical pressures are likely to drive recurring revenue growth into the low single-digit range for the full year."
ICE shares fell 3.3%.
Patrick O'Shaughnessy, an analyst at Raymond James, said recurring revenue in mortgage technology and the elongated sales cycle in ICE's fixed income data and analytics segments remain "points of frustration" for investors.
"That said, we believe things are clearly trending in the right direction," said O'Shaughnessy.
On an adjusted basis, ICE reported a profit of $1.43 per share for the quarter ended June 30, above analysts' average estimates of $1.37 a piece, according to Refinitiv data.
Revenues in fixed income and data services rose 6% from a year ago to $546 million, while transaction revenue grew 23%, including 25% growth in ICE's credit default swap clearing business.
ICE's rival Nasdaq beat estimates for second-quarter profit last month, helped by resilient demand for its investment-related products and capital markets solutions.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.