Bloomberg News

ICE Rises Most Since August on OTC Surge, Profit: Atlanta Mover

February 09, 2012

Feb. 8 (Bloomberg) -- Intercontinental Exchange Inc., the second-largest U.S. futures market, rose the most since August as it said commissions from over-the-counter clearing rose last month and fourth-quarter profit gained 28 percent.

Net income climbed to $127 million, or $1.73 a share, from $99.1 million, or $1.34, a year earlier, the Atlanta-based company said today in a statement. Profit excluding certain items was $1.76 a share, beating the $1.69 a share average estimate of 21 analysts surveyed by Bloomberg.

Daily commissions for energy over-the-counter transactions rose 21 percent to average $1.6 million in the quarter, compared with the year-earlier period, the company said last month. The company said in a slide presentation today that average OTC commissions in January rose to more than $2 million.

“We expect the stock to react positively today” based on the earnings and the increase in OTC commissions, said Chris Allen, an analyst in New York at Evercore Partners Inc., who was expecting commissions to be $1.6 million.

Intercontinental advanced 6 percent to $130.08 in New York Stock Exchange composite trading. It earlier gained 7.1 percent, the most since Aug. 9. Shares have risen 10 percent in the past year.

The company said in its annual report that it was holding $65.8 million in cash margin and guaranty funds that belong to MF Global Holdings Ltd., the futures broker that in October filed the eighth-largest bankruptcy.

MF Global Cash

The company said it was awaiting instructions from the bankruptcy trustee on how to return the funds, which were spread over three of Intercontinental’s clearinghouses.

Kelly Loeffler, an Intercontinental spokeswoman, said the money belonged to MF Global and not its customers, as all of that money under the company’s control was returned in November.

Average daily trading volume at Intercontinental’s London- based ICE Futures Europe climbed 22.4 percent from the year-ago period to 1.04 million contracts. The exchange trades futures for heating oil and Brent crude, which sets the price for oil outside the U.S.

Revenue rose to $327 million from $285 million.

CME Group Inc., owner of the world’s largest futures market, said last week that fourth-quarter profit missed estimates as its trading volume slowed in the last months of 2011. Excluding a tax benefit CME Group received as an inducement to stay in Chicago and other items, profit was $3.55 a share, trailing the average estimate of $3.64 in a Bloomberg survey, the company said Feb. 2.

--Editors: Dennis Fitzgerald, Shannon D. Harrington

To contact the reporter on this story: Matthew Leising in New York at mleising@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net


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