Intercontinental Exchange Net Income Declines on Energy Trading

Intercontinental Exchange Inc. (ICE), which agreed to buy NYSE Euronext for $8.2 billion in December, said first-quarter net income dropped 8.4 percent as trading in energy and financial futures contracts fell.

Net income declined to $135.4 million, or $1.85 a share, from $147.9 million, or $2.02 a share, a year earlier, the owner of the second-largest U.S. futures market said in a statement. Excluding costs related to its NYSE Euronext purchase and other items, the company earned $2.03 per share, exceeding analyst estimates of $1.97 per share, according to a survey conducted by Bloomberg.

A 27 percent drop during the quarter in natural gas trading at the company’s ICE Futures Europe market pushed total energy trading down 4.3 percent, the Atlanta-based company said last month. Energy transactions make up about 88 percent of the company’s total volume, according to Rich Repetto, an analyst at Sandler O’Neill & Partners LP in New York. Futures on equity indexes at its ICE Futures U.S. market fell 19.6 percent, driving its financial volume to decline 12 percent.

Revenue fell 3.6 percent to $351.9 million in the quarter from $365.2 million.

Intercontinental will gain markets in interest-rate derivatives from its purchase of NYSE Euronext, which is expected to close in the second half of this year. The company said today it will hold a shareholder vote on June 3 to seek approval of the deal.

NYSE Euronext said yesterday that its first-quarter profit rose 45 percent as revenue increased and it cut costs. Net revenue from the New York-based company’s derivatives units rose 14 percent in the quarter while equity trading revenue, excluding regulatory fees and liquidity payments, dropped 5.6 percent.

Intercontinental rose 0.6 percent to $162.93 in New York yesterday. The shares have advanced 31.6 percent this year.

To contact the reporter on this story: Matthew Leising in New York at mleising@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net

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