Intercontinental Exchange beats profit estimates on robust trading activity

By Prakhar Srivastava and ‌Pragyan Kalita

April 30 (Reuters) - Intercontinental ​Exchange ​on Thursday reported first-quarter profit exceeding analysts' estimates as heightened market volatility boosted trading volumes for the New York Stock Exchange ‌operator.

Its shares rose 1.5% in afternoon trading.

Escalating Middle East tensions, concerns ⁠over private credit and fears of potential AI-led disruption rattled markets in the reported ‌quarter, while prolonged oil market ‌uncertainty drove investors to trade more actively and use derivatives to hedge risks.

Such swings typically benefit exchange operators by lifting trading volumes and transaction ​fees.

ICE's total average daily volume surged to 45% year over year in the quarter, while ADV for energy rose to 32%.

Revenue from ICE's ⁠exchange business, its largest segment, rose 30% to $1.78 billion in the first quarter, while that from energy-related ​trading increased 46% to $814 million.

ICE's results mirror those of its peers. CME Group reported a rise in profit and Nasdaq beat ​profit estimates, both benefiting from higher trading ‌volumes during the quarter.

However, TD Cowen analyst Bill Katz said in a note that April month-to-date volume checks indicated a "nearly ⁠50% slowdown in futures and options volumes from March's Operation Epic Fury induced spike, though open interest continues to hold at elevated levels."

Markets were "doing and performing very ⁠well" even before the Iran conflict, driven by factors such as trade tensions, energy supply ​concerns and rising demand for power, ICE President Ben Jackson said in an earnings call.

He said recent trading activity was supported by a "multi-year structural repricing across energy," rather ‌than one-off geopolitical shocks.

ICE's fixed income and data services revenue rose 10% and mortgage technology revenue was up 6% ‌in the quarter versus a year ago.

Its adjusted earnings were $1.34 billion, or $2.35 per ⁠share, for the quarter ended March ‌31, beating analysts' average ​estimate of $2.26 per share, according to data compiled by LSEG.

(Reporting by Prakhar Srivastava and Pragyan Kalita in Bengaluru; Editing by ‌Pooja Desai)

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