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, said commissions from a growing number of over the counter energy contracts helped the US electronic futures exchange outperform its competitors and report record net income in the first quarter.
The company’s net income grew 15 per cent to $148m in the period compared with the same time a year ago, with earnings at $2.02 a share coming in line with market consensus.
Revenues moved 9 per cent higher to $365m in the three-month period to March 31, driven by a 15 per cent rise in OTC energy volume to $163m.
Average daily commissions on those contracts grew 20 per cent to $1.95m, which helped the company’s top line despite a slower rate of growth in its other products, including credit default swap clearances.
Ed Ditmire, an analyst at Macquarie Securities, said: “[Their] first quarter is relatively healthy compared to an exchange industry which is struggling to hold year-ago levels, but was only in line with expectations.”
Revenues from one OTC energy contract, WTI futures and options, however, declined 42 per cent in the period – reflecting the growing role of Brent as the dominant benchmark for crude.
“In April, Brent was the most heavily traded crude futures contract in the world … pricing approximately 70 per cent of international oil,” Jeffrey Sprecher, ICE’s chairman and chief executive, said in a conference call.
To meet the demand in the market, the ICE said it was rolling out new Brent products.
ICE performed better than other exchanges, including the CME and NYSE Euronext, which saw profits decline by more than 40 per cent each in their respective first quarters. Both rivals blamed regulatory uncertainty for a slowdown in trading activity.
“Our results continue to reflect the role that ICE’s markets and clearing houses play in enabling companies to manage risks in a dynamic economic and regulatory environment,” Mr Sprecher added.
But shares in ICE closed down 2.49 per cent to $127.85 on Wednesday, as the company said in a separate release that commissions on energy contracts had fallen by about 23 per cent in April to an average of $1.5m daily.
Analysts said that despite the fact the company reported that futures volumes – which attributed for just under half of total revenues in the first quarter – grew 21 per cent in April, the slowdown in commissions would hurt shares.
Niamh Alexander, analyst at Keefe, Bruyette & Woods, said: “We see risk to second-quarter consensus on OTC energy [commissions], which is tracking at $1.5m in April and 15 per cent below our estimate of $1.758m, and lower than expected futures volume, though April can be the slowest month in the quarter.”