NYSE parent ICE’s profit beats as commodity markets boost trading volumes

By Manya Saini and Laura Matthews

(Reuters) -Intercontinental Exchange beat Wall Street estimates for fourth-quarter profit on Thursday as commodity markets powered growth in trading volumes at the New York Stock Exchange parent.

The global commodity and energy markets saw significant volatility last year due to extreme weather conditions throughout the world. Meanwhile, the Middle East conflict also led to an increase in oil trading volumes.

On an adjusted basis, Intercontinental Exchange (NYSE:) earned $1.33 per share in the quarter, beating analysts’ estimates of $1.29, according to LSEG data.

The exchange operator’s open interest (OI), or the total number of outstanding derivative contracts in energy, surged 35%. OI also jumped 27%.

The company’s average daily volumes in the energy segment rose 35% in the quarter.

Trading volumes at exchanges typically do better in times of market fluctuations as investors rejig portfolios or when there is a broad-based rally which reduces risk-off sentiment and encourages riskier trades.

Average daily volumes at ICE increased 26% in the fourth quarter. For the full-year 2023, it logged growth of 10%.

Intercontinental Exchange’s fourth-quarter consolidated net revenue rose 25% to $2.2 billion.

ICE’s exchanges segment revenue, the biggest component of its revenue base, rose 16% to $1.1 billion, powered by a 48% surge in energy.

Housed within the company’s exchanges segment, the listings unit saw a 4% decline as initial public offerings in the United States continue to remain subdued.

Although analysts and bankers expect the IPO market to rebound this year on expectations of a continued rally in the broader markets and firming bets on the U.S. Federal Reserve cutting interest rates in the summer, recovery so far has been uneven.

Noting the company’s 18th consecutive year of record revenues and continued earnings-per-share growth, Jeff Sprecher, CEO of ICE, said the company is “better positioned than ever to capitalize on secular and cyclical trends that occur across asset classes.”

ICE’s share price rose 4.6% after the call to $134.

Rival Nasdaq last week also reported a higher quarterly profit on strong performance at its solutions business.