(Reuters) -Intercontinental Exchange beat Wall Street estimates for fourth-quarter profit on Thursday as commodity markets powered growth in trading volumes at the New York Stock Exchange parent.
The global commodity and energy markets saw significant volatility last year due to extreme weather conditions in parts of the U.S. and the world over. Meanwhile, the Middle East conflict also led to an increase in oil trading volumes.
On an adjusted basis, Intercontinental Exchange earned $1.33 per share in the quarter, beating analysts’ estimates of $1.29, according to LSEG data.
The exchange operator’s open interest (OI), or the total number of outstanding derivative contracts in energy, surged 35%. Brent OI also jumped 27%.
The company’s average daily volumes in the energy segment rose 35% in the quarter.
Trading volumes at exchanges typically do better in times of market fluctuations as investors rejig portfolios or when there is a broad-based rally which reduces risk-off sentiment and encourages riskier trades.
Average daily volumes at ICE increased 26% in the fourth quarter. For the full year 2023, it logged a 10% growth.
Intercontinental Exchange’s fourth-quarter consolidated net revenue rose 25% to $2.2 billion.
ICE’s exchanges segment revenue, the biggest component of its revenue base, rose 16% to $1.1 billion, powered by a 48% surge in energy.
Housed within the company’s exchanges segment, the listings unit saw a 4% decline as initial public offerings in the U.S. continue to remain subdued.
Though analysts and bankers expect the IPO market to rebound this year on expectations of a continued rally in the broader markets and firming bets of U.S. Federal Reserve cutting interest rates in the summer, recovery so far has been uneven.
Last week, rival Nasdaq also reported a higher quarterly profit on strong performance at its solutions business.
(Reporting by Manya Saini in Bengaluru; Editing by Shounak Dasgupta)
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