Post Earnings Coverage as Intercontinental Exchange's Q4 EPS Grew 9%; Beat Market Estimates

Upcoming AWS Coverage on Bats Global Markets Post-Earnings Results

LONDON, UK / ACCESSWIRE / February 24, 2017 / Active Wall St. announces its post-earnings coverage on Intercontinental Exchange, Inc. The Company released its financial results for the fourth quarter fiscal 2016 (Q4 FY16) and full year fiscal 2016 (FY16) on February 07, 2017. The Atlanta and New York-based Company's quarterly adjusted diluted EPS grew 9% y-o-y, beating market consensus estimates. Register with us now for your free membership at:

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One of Intercontinental Exchange's competitors within the Diversified Investments space, Bats Global Markets, Inc. (AMEX: BATS), reported on February 09, 2017, its fourth quarter 2016 financial results. AWS will be initiating a research report on Bats Global Markets in the coming days.

Today, AWS is promoting its earnings coverage on ICE; touching on BATS. Get our free coverage by signing up to:

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Earnings Reviewed

During the quarter ended on December 31, 2016, Intercontinental Exchange reported total revenues of $1.48 billion compared to $1.22 billion recorded at the end of Q4 FY15. Total revenue numbers for Q4 FY16 outperformed market consensus estimates of $1.13 billion. The Company's total revenues, less transaction-based expenses rose during Q4 FY16 to $1.14 billion from $875 million in last year's comparable quarter.

The global stock and derivative exchange operators reported net income attributable to Intercontinental Exchange of $352 million, or $0.59 per diluted share, in Q4 FY16, compared to $370 million, or $0.66 per diluted share, in Q4 FY15. Meanwhile, the Company's adjusted net income attributable to Intercontinental Exchange for Q4 FY16 came in at $428 million, or $0.71 per diluted share, versus $369 million, or $0.65 per share, in the previous year's same quarter. Wall Street had expected the Company to report adjusted net income of $0.69 per share.

In FY16, Intercontinental Exchange's total revenue came in at $5.96 billion versus $4.68 billion in the previous year's comparable period. The Company reported net income attributable to Intercontinental Exchange of $1.42 billion, or $2.37 per diluted share, in FY16, compared to $1.27 billion, or $2.28 per diluted share, in FY15. Additionally, adjusted net income attributable to Intercontinental Exchange for FY16 stood at $1.67 billion, or $2.78 per share, compared to $1.36 billion, or $2.43 per share, in FY15.

Operational Metrics

For the reported quarter, the Company's total operating expenses were $580 million versus $457 million in the prior year's corresponding quarter. The Company's operating income for Q4 FY16 came in at $558 million compared to $418 million in Q4 FY15. The Company's operating margin for Q4 FY16 stood at 49% compared to 48% in Q4 FY15. During the reported quarter, the Company's adjusted operating income increased to $645 million from $511 million in Q4 FY15. Furthermore, adjusted operating margin during Q4 FY16 was 57% versus 58% in the prior year's same quarter.

Segment-wise

Intercontinental Exchange's Data & Listings segment reported net revenues of $620 million in Q4 FY16 compared to pro-forma total revenues of $570 million in Q4 FY15. The segment's adjusted operating margin rose to 52% in Q4 FY16, from adjusted pro-forma operating margin 48% in the previous year's comparable quarter.

Trading & Clearing segment's total revenue increased marginally to $518 million in Q4 FY16 from $516 million in the previous year's same quarter. Furthermore, the segment reported adjusted operating margin of 63% in Q4 FY16 compared to 59% in Q4 FY15.

Cash Flow & Balance Sheet

During full-year FY16, Intercontinental Exchange consolidated cash flows from operations were $2.1 billion, up 64% y-o-y. Moreover, operational capital expenditures in FY16 were $177 million and capitalized software development costs totaled $115 million. At the close of books in the reported quarter, Intercontinental Exchange had $407 million in cash compared to $627 million at the close of books on December 31, 2015. Additionally, the Company's long-term debt decreased to $3.87 billion on December 31, 2016, from $4.72 billion on December 31, 2015.

Dividend

In a separate press release on February 07, 2017, Intercontinental Exchange's Board of Directors announced a hike in the quarterly dividend per share by 18% from its $0.17 per share to $0.20 per share in Q1 FY17. The dividend is payable on March 31, 2017, to shareholders of record as of March 16, 2017.

Outlook

In its guidance for the full-year FY17, Intercontinental Exchange projected that its Data services' GAAP revenues would grow by 5% y-o-y, while on constant currency Data services' revenues are expected to increase by 6% y-o-y. Furthermore, the Company foresees the repurchase of shares worth $200 million in Q1 FY17.

Stock Performance

At the close of trading session on Thursday, February 23, 2017, Intercontinental Exchange's stock price slightly climbed 0.66% to end the day at $58.11. A total volume of 2.97 million shares were exchanged during the session, which was above the 3-month average volume of 2.75 million shares. The Company's share price has soared 1.13% in the past one month and has advanced 3.00% on YTD basis. The stock currently has a market cap of $34.74 billion. Furthermore, the stock is trading at a PE ratio of 24.48 and has a dividend yield of 1.38%.

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