Electronic energy marketplace and soft commodity exchange IntercontinentalExchange Inc. (ICE) said Wednesday it posted record quarterly consolidated net income for 1Q2007 due to strong volume at ICE Futures, the company's UK futures business segment; at the Board of Trade of the City of New York Inc. (NYBOT), ICE's U.S. futures business segment; in ICE's global over-the-counter (OTC) business segment; and in the company's market data business segment, which now includes the NYBOT market data business. The company nearly tripled its net income to $55.6 million for 1Q2007, an increase in quarterly earnings of 183% compared to $19.7 million in net income recorded for 1Q2006.
Consolidated revenues in the quarter increased 152% to a record $126.6 million, up from $50.3 million in the first quarter of 2006. Diluted earnings per share in the first quarter of 2007 were $0.80, a 142% increase compared to $0.33 in the same period in 2006.
The first quarter of 2007 represents the first quarter that NYBOT is included in ICE's financial results. NYBOT will be reported as a separate business segment in the company's consolidated financial statements.
"This marks our fifth consecutive record quarter, and these results were achieved amid continued rapid expansion of our markets while we executed on many key initiatives in our core commodities business," said ICE CEO Jeffrey C. Sprecher. "In a highly competitive environment, ICE continues to demonstrate its ability to innovate and to serve customers around the globe, while maintaining its lead in the electronic energy markets and successfully adding new products, customers and markets."
Competitive market indeed. ICE's chief rival, the New York Mercantile Exchange (Nymex), also recorded record net income. Nymex's net income increased 67% to $56.2 million for 1Q2007 compared to $33.6 million for the first quarter of 2006 (see related story).
ICE's total average daily volume (ADV) for its electronically traded energy contracts in ICE's global futures and OTC markets exceeded the one million contract mark for the first time, with ADV of 1.2 million contracts in the first quarter of 2007, representing a 96% increase compared to ADV of 603,000 contracts in the prior year's first quarter.
ICE has definitely been busy. After completing its acquisition of NYBOT in January (see Daily GPI, Jan. 16), the Atlanta-based exchange went on to complete a multi-tiered alliance with NGX and a purchase of Intelligence Press Inc.'s (IPI) NGI indexes with a perpetual leaseback agreement that will allow IPI to continue to determine and publish the NGI indexes (see Daily GPI, March 29; April 13). ICE is also competing against the Chicago Mercantile Exchange for wooing rights of CBOT (see Daily GPI, March 23).
"During the quarter, we completed our acquisition of NYBOT, successfully launched electronic trading in NYBOT's soft commodity contracts and integrated the NYBOT operations smoothly and ahead of schedule. At the same time, we extended our reach into the energy markets, including our technology and settlement alliance with NGX to expand even further into Canadian markets, our purchase of the NGI indexes, and our continued work on new products including the ICE Middle East Sour Crude futures contract," said Sprecher. "In addition, we were granted 60/40 tax treatment for qualified U.S.-based ICE Futures customers, began developing a world-class clearing solution, and introduced our new matching engine in our key OTC markets. Finally, we offered what we believe is a superior proposal to merge with the Chicago Board of Trade, with a 13.4%, or $1.1 billion, premium for CBOT shareholders."
In addition to earnings, ICE also announced Wednesday that it has appointed Scott A. Hill as senior vice president and CFO effective May 14. Richard V. Spencer, ICE senior vice president and CFO since December 2001, was recently appointed vice chairman of NYBOT, and has been named to the newly created post of vice chairman of ICE.
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