IntercontinentalExchange’s 4Q profit jumps 72 percent but misses expectations on high costs

IntercontinentalExchange posts 4Q profit surge

ATLANTA — IntercontinentalExchange Inc., an over-the-counter and futures exchanges operator, posted a 72 percent profit increase for the fourth quarter Wednesday, spurred by higher fees from increased trading volume in energy.

However, a 21 percent surge in operating costs kept results from meeting analysts’ expectations. Shares slid $3.19, or 3.2 percent, to close at $95.68.

IntercontinentalExchange, based in Atlanta, operates three regulated futures exchanges: ICE Futures Europe, ICE Futures U.S. and ICE Futures Canada. Total revenue rose 24 percent to $256.6 million, as transaction and clearing fee revenue increased 29 percent to $229.2 million on strong trading volume in ICE’s futures and OTC energy segments and derivatives clearing service.

Net income for the period nearly doubled to $84.3 million, or $1.13 a share, from $48.9 million, or 67 cents a share. But costs also rose. The latest quarter included an $11 million increase in expenses related to credit derivatives, an additional $5 million for increased employee bonuses and a $10 million severance and tax-related charge.

Adjusted income totaled $1.12 a share, below the $1.14 per share expected by analysts surveyed by Thomson Reuters.

Profit for the year rose 5 percent to $316 million, or $4.27 a share, from $301 million, or $4.17 a share, in 2008. Revenue climbed 22 percent to $994.8 million from $813.1 million.

Looking ahead, ICE said it expects to boost staffing by 4 percent to 5 percent for the full year. Capital expenditures are expected to range between $25 million and $30 million, as ICE continues to invest in trading and clearing technology and data centers.

The company said its board also authorized $300 million worth of stock repurchases, expanding ICE’s existing $200 million buyback program.

The company expects its credit default swap clearing business will generate revenue of $60 million to $80 million in 2010.