By Laura Matthews and Sri Hari N S
(Reuters) - New York Stock Exchange-parent Intercontinental Exchange beat analysts' expectations for third-quarter profit on Thursday as a volatile market boosted trading volumes, giving ICE (NYSE:ICE) the best quarter in the company's history for revenue and earnings per share growth.
Revenue from its biggest exchanges segment rose 11% to $1.11 billion, buoyed by a broader market recovery and investors churning their portfolio to hedge against risks from uncertainty over the economy and interest rates.
Revenue from transaction was $754 million, up 13% from a year ago, driven by 42% growth in ICE's energy revenues and similarly strong performance in its global natural gas products.
Warren Gardiner, chief financial officer, told analysts on a call that ICE's record $2 billion in net revenue, up 4%, was driven by the exchange segment growth.
Average daily volume across the exchange's global oil business was up 40% in Q3, compared to a year ago, with open interest rising 26% year-over-year as of the end of October.
ICE's fixed income & data services business reported $559 million in revenue, a 4% increase compared to same time last year.
Transaction revenues in this business increased 6%, bolstered by 9% growth ICE bonds and 5% growth in the credit default swap clearing business.
Those strong trading volumes help to offset weakness in the company's mortgage technology segment, which saw revenue totaling $330 million, down 7% but continuing to outperform the industry that has seen nearly 20% decline in mortgage origination volumes.
"The best time to lay the groundwork for a strong future is when your target customers are experiencing stress and are open to new vendors and new platforms to alleviate their problems," Jeff Sprecher, ICE's chief executive officer, told analysts about the exchange's continued investment in the mortgage market.
On an adjusted earnings per share basis, the company reported a record $1.46, up 11% for the three months ended Sept. 30, compared with analysts' average estimate of $1.39, according to LSEG data.
ICE expects full-year capital expenditures to be in the range of $500 million to $525 million.
ICE's shares fell almost 1% after the company reported its results, and was last down 2% at $106.
Andrew Bond, managing director and senior fintech analyst at Rosenblatt Securities, said this might be because of the higher than expected expense guidance in Q4.
Rival Nasdaq also posted an upbeat third-quarter last month, helped by stronger demand for its indexes and anti-financial-crime products.