ICE Exceeds Profit Expectations Driven by Surge in Energy Trading, Reports Reuters

By Pritam Biswas and Lewis Krauskopf

Intercontinental Exchange Sees 9% Profit Increase Amid Strong Energy Trading

Intercontinental Exchange (ICE) announced a 9% rise in quarterly profits that exceeded analyst expectations, driven by strong trading activity in energy markets. The parent company of the New York Stock Exchange reported that revenue from energy-related trading surged 32% in the second quarter, reaching $469 million.

Overall, total revenue from ICE’s exchange operations, the largest segment of its income, jumped 14% to $1.25 billion during the quarter. Increasing volatility in global commodity and energy markets, fueled by geopolitical tensions in the Middle East, has led to heightened trading activity as investors evaluate the effects on supply chains.

Analyst Owen Lau from Oppenheimer noted, “There are still lots of geopolitical risks and uncertainty in the world that drive the volatility and the hedging need for energy prices,” highlighting ICE’s robust performance in energy trading.

In morning trading, ICE shares climbed 0.7% and hit an intraday record high. The stock has risen over 18% in 2024, with a notable surge in the past month. This increase has been supported by growing expectations that the U.S. Federal Reserve may lower interest rates in the near future, which could positively impact ICE’s mortgage technology business.

The company reported adjusted earnings of $876 million for the second quarter, equating to $1.52 per share, surpassing analysts’ forecasts of $1.49 per share.

In contrast, the listings unit within ICE’s exchange segment experienced a 3% decline in second-quarter revenue. Despite the NYSE achieving greater income from IPO proceeds in the first half of 2024 compared to the previous two years, high interest rates have tempered investor expectations for a significant recovery in the U.S. IPO market, particularly after uneven performances from several notable listings in the second quarter.