Intercontinental Exchange, owner of the New York Stock Exchange, on Thursday reported a quarterly profit that topped Wall Street expectations, helped by strong gains in its mortgage technology business and robust demand for its interest rate and energy hedging products.
ICE earned $1.30 per share in the quarter ended Sept. 30, 8 cents above the consensus estimate of analysts, according to IBES data from Refinitiv.
Shares in the Atlanta-based company, which runs futures and equities exchanges as well as clearing houses and data services, were up 3.39% at a record high of $137.49 early Thursday.
The primary driver of the earnings beat was ICE’s mortgage technology business, said Jefferies analyst Daniel Fannon.
ICE has been making deals in the mortgage sector over the past few years – most notably its $11 billion acquisition of Ellie Mae – in the hope of benefiting from a push to automate the home financing process.
“In this COVID environment we saw a year ago the number of documents that were being recorded in the counties moving more and more away from paper and towards digitization and using our rails to do so, and we continue to see that,” ICE President Ben Jackson said on a call with analysts.
While mortgage demand has slowed as longer-term interest rates begin to rise, ICE’s mortgage technology revenues rose 7% year-over-year to $366 million.
Revenue from ICE’s exchanges unit rose 17% to $959 million, helped by strong demand for interest rate and energy futures used in hedging.
Net income attributable to the company was $633 million, or $1.12 per share in the quarter, from $390 million, or 71 cents per share, a year earlier.
Excluding transaction-based expenses, total revenues rose nearly 29% to $1.8 billion.