Sharply-higher profits of local owner of New York Stock Exchange beat analysts’ forecasts
Editor’s Note: This story has been updated with Mayor Kasim Reed’s remarks at the 2015 State of the City event. The previous version contained remarks from Reed’s 2014 event.
By David Pendered
The metro Atlanta company that purchased the New York Stock Exchange reported profits Thursday that beat analysts’ expectations.
Intercontinental Exchange, Inc. has created ways to capitalize on the shift from personal to electronic trading, putting it at the heart of metro Atlanta’s robust financial technology sector.
Based in Sandy Springs, ICE reported diluted earnings per share of $2.54 in the fourth quarter of 2014, and $8.55 for the full year. Shares were trading between $225.75 and $215.83 early Thursday afternoon. The company’s market cap was listed at $25.72 billion.
ICE reported net income of $288 million on $800 million in consolidated revenues, less transaction-based expenses. Analysts had predicted earnings of $2.54 and revenues of $784 million, according to wsj.com.
These revenue figures are part of the reason civic leaders are pushing hard to expand the region’s tech sector.
Atlanta Mayor Kasim Reed is calling for Atlanta to retain a greater proportion of technology graduates, raising the rate to 75 percent from 50 percent.
In March, Reed is scheduled to travel to Israel on a cyber-security trade mission, according to a report in globalatlanta.com. Georgia already ranks in the top three states for information security, with more than 115 companies employing more than 10,000 network and computer engineers, according to a report by the Technology Association of Georgia.
In his State of the City address Wednesday, Reed’s prepared remarks said: “Next week, I am going to travel to Silicon Valley to meet with the leading technology executives because less than 10 percent of venture funds in the United States of America are coming to the Southeast and we’ve got to change that.”
When ICE bought the NYSE, it was struggling to compete with other equity markets. A decade ago, the exchange had an 80-percent share in trading U.S. equities, and that proportion had fallen to 25 percent by 2013, according to a Bernstein Research report cited by economist.com.
ICE has changed the dynamics, and recorded strong revenues, with a combination of new technology and old-fashioned customer service, according to a comment from Chairman/CEO, Jeffrey Sprecher contained in a statement released Thurday:
- “By focusing on the requirements of our customers and delivering on our integration milestones, we achieved record results in 2014. We strengthened our leadership position in growth markets, including global oil, natural gas and swaps clearing….
“We grew revenues at the New York Stock Exchange, increased market share in trading and again led in global capital raising with 129 initial public offerings. We remain focused on delivering growth and solid returns to our investors by putting the needs of our customers first.”
ICE CFO Scott Hill provided the following comment in the company’s statement:
- “Our strong cash generation and balance sheet enabled us to pursue strategic growth initiatives this year while returning nearly $1 billion of capital to shareholders through dividends and share buybacks. We recorded our 18th record year in Brent volume and earned nearly $100 million in CDS clearing revenues.
- “We continued to expand our leadership in clearing through product innovation and strategic acquisitions. At the same time, we completed nearly $290 million, or over 50 percent, of our synergy target by the end of 2014. The strong momentum we have established entering 2015 coupled with continued execution of our strategic initiatives and further expense reductions during 2015 support our target of once again delivering double digit earnings growth, strong cash generation and meaningful capital returns.”