August 6, 2013 / 11:54 AM / 6 years ago

ICE profit rises 7 percent on energy futures, CDS clearing

NEW YORK (Reuters) - IntercontinentalExchange Inc (ICE.N), which is in the process of buying NYSE Euronext NYX.N for $8.2 billion, reported a 7 percent rise in second-quarter profit on Tuesday, helped by higher energy futures volumes and credit default swap clearing.

Specialist traders work at the booth that trades the stock for IntercontinentalExchange, on the floor at the New York Stock Exchange, May 1, 2013. REUTERS/Brendan McDermid

Net income attributable to the Atlanta-based derivatives exchange and clearing house operator was $153.3 million, or $2.09 a share, up from $143.2 million, or $1.95 a share, a year earlier.

Excluding costs involving the NYSE deal and other one-time items, earnings were $2.19 per share, topping analysts’ average estimate by 4 cents, according to Thomson Reuters I/B/E/S.

Revenue rose 6 percent to $371.6 million as futures average daily volume increased 3 percent to 3.5 million contracts.

Transaction and clearing fee revenue rose 4 percent to $319 million.

Revenue from credit default swap trade execution, processing and clearing business was up 11 percent to $40 million. Market data revenue gained 8 percent to $40 million.

Operating expenses climbed 8 percent to $147 million.

ICE said it expects 2013 adjusted consolidated expenses to increase by 2 percent to 3 percent, versus prior guidance of 3 percent to 5 percent.

The company said in December that it would buy NYSE Euronext, operator of the New York Stock Exchange, in a deal that will give ICE control of Liffe, Europe’s second-largest derivatives market, to help expand into the interest rate futures business.

ICE expects costs related to the NYSE deal of $5 million to $7 million in the third quarter.

Shareholders of both ICE and NYSE have signed off on the deal, as has the European Commission. Approval is still needed from the U.S. Securities and Exchange Commission and national regulators in Europe.

NYSE reported last week that its second-quarter profit rose 38 percent, helped by cost-cutting and derivatives trading.

Reporting by John McCrank; Editing by Gerald E. McCormick and John Wallace

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