Earnings Preview: Intercontinental Exchange

Intercontinental Exchange (ICE) is expected to report Q2 earnings before market open Monday, Aug. 4, with a conference call scheduled for 8:30 am ET.

Guidance

Analysts are looking for EPS of $1.19 on revenue of $195.84M. The consensus range for EPS is $1.15 to $1.22, while the consensus range for revenue is $192.71M to $200.90M, according to First Call.

Analyst Views

A prominent research firm and some investors have expressed pessimism about ICE's outlook in recent days. Citigroup recently expressed concern that ICE will be hurt by a deceleration in energy trading volumes. The firm also believes the company could be hurt by an increase in government regulation and market share losses. The firm thinks the Street's 2008 estimates for ICE are too high, and it maintained its Hold rating on the shares.

Meanwhile, some investors are concerned that the credit crunch will cause ICE's revenue to decline, according to a recent "Heard on the Street" column published in the Wall Street Journal. According to this school of thought, banks and hedge funds will make fewer market bets because of the damage they have suffered as a result of the credit crisis.

On a positive note, BMO Capital upgraded ICE to Outperform from Market Perform on July 15, as it believes that the threat posed to the company by potential legislation from the U.S. Congress had declined sharply. The firm did not believe that new laws would hurt the company as badly as assumed by the stock's valuation. 

Comments

[wee]

50/50 chance of an upside surprise. Remember the oil numbers, lots of trades accross ICE. No current position for me.