UPDATE 3-ICE earnings and CDS expectations drive up shares

* Q1 earnings 98 cents per share

* Sees up to $30 mln in revenue from CDS clearing in '09

* Shares soar 12.5 percent to highest point in 8 months

* CEO sees more CDS participation soon (Adds CEO, analyst, shares, byline)

By Jonathan Spicer

NEW YORK, May 5 (Reuters) - IntercontinentalExchange Inc's (ICE.N) quarterly earnings beat expectations and its management talked up opportunities in credit derivatives, boosting shares of the U.S. exchange and clearinghouse operator 12.5 percent.

First-quarter earnings fell 22 percent as the financial crisis weighed on energy trading, but analysts applauded ICE's better-than-expected cost savings. The company's shares jumped $11.33 to $101.87, their highest point in eight months.

All eyes were on the company's modest revenue expectations for U.S. credit default swaps, or CDS, which the company began clearing in March, ahead of rivals.

ICE, the second-biggest U.S. derivatives exchange, expects its new CDS clearinghouse to yield up to $30 million in revenue and up to $24 million in expenses through the rest of the year -- better than most analysts expected.

Chief Executive Jeffrey Sprecher expects to "expand participation in the clearinghouse very shortly," and is "working directly with the buy side" participants -- seen by some as a weakness in ICE's CDS venture.

"This CDS market is morphing on an accelerated pace given all the stress that exists in the credit market these days ... but certainly the trend is toward where we have placed the company," Sprecher said on a conference call.

He added that ICE, which specializes in futures markets, is working with Europe-based dealers and expects to launch its European CDS clearinghouse "in a few weeks."

The company earned $72.2 million, or 98 cents per share, in the three months that ended March 31, down from $92.3 million, or $1.29 per share, in the same period a year earlier.

Excluding one-time items, the company earned $80 million, or $1.09 per share, in the quarter, ahead of the $1.01 per share expected by analysts. Revenue was up 12 percent at $231.6 million, meeting expectations.

ICE's quarterly results are usually predictable given it reports monthly volumes, and shares are more sensitive to revenue guidance. The shares were the biggest percentage and net gainer on the S&P Financial .GSPF index on Tuesday.

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