(Reuters) - Intercontinental Exchange Inc (ICE.N), which owns the New York Stock Exchange, reported a quarterly profit that narrowly beat analyst estimates on Wednesday, led by growth in its market data services unit and a tight leash on expenses.
U.S. exchanges have been pivoting away from market-dependent services to insulate themselves from volatility swings, and have been moving into more stable businesses like data services, the demand for which has also substantially increased over the last couple of years.
Revenue from ICE’s market data services unit, which publishes daily indexes and historical price data, rose 2 percent to $525 million.
Revenue from ICE’s transaction and clearing business, its biggest, fell 7.3 percent to $758 million.
Net income attributable to the company rose to $1.23 billion, or $2.08 per share, in the fourth quarter ended Dec. 31, from $352 million, or 59 cents per share, a year earlier. (reut.rs/2sjee6K)
The reported quarter included a $764 million gain related to deferred tax benefits, as part of the tax code overhaul.
On an adjusted basis, the company earned $433 million or 73 cents per share, above average analysts’ estimate of 72 cents, according to Thomson Reuters I/B/E/S.
ICE said it expects adjusted expenses for full year 2018 to range between $2.00 billion and $2.05 billion as it plans to invest in the company and its employees.
Chief Financial Officer Scott Hill said on a post-earnings call that the company would invest $35 million to $40 million on its employees in 2018 and $30 million to $35 million to further strengthen its technological capabilities.
Deutsche Bank analysts said in a note on Wednesday that ICE’s 2018 expense forecast is above their current estimates, which may pressure the stock.
Shares were down marginally at $71.82 in morning trading.
Total revenue, excluding transaction-based expenses, was flat at $1.14 billion, while total operating expenses fell 4.8 percent.
Reporting By Aparajita Saxena and Nikhil Subba in Bengaluru; Editing by Shounak Dasgupta