DOW JONES NEWSWIRES
IntercontinentalExchange Inc.'s (ICE) fourth-quarter net income
fell 24% on a $16 million write-down related to its investment in
an Indian exchange as the commodities exchange operator expects to
cut between 5% and 7% of its work force this quarter.
The move is a sharp contrast to ICE's October statement that it
would increase its work force by 2% during the fourth quarter. For
the full year, the company said Tuesday it expects payroll to be
flat to down 5% from the current 795 employees.
The commodities exchange operator, which is predominantly in
energy futures, reported net income of $48.9 million, or 67 cents a
share, down from $64.7 million, or 90 cents a share, a year
earlier. The write-down related to ICE's investment in the National
Commodity and Derivatives Exchange of India totaled 15 cents a
share.
Revenue increased 30% to $207.3 million as transaction fee
revenue climbed 34%, driven by new products and strong volumes in
its futures and global over-the-counter segments. Transaction
revenue rose 18% in the futures segment and 54% in the global
over-the-counter segment.
Analysts surveyed by Thomson Reuters expected earnings,
excluding items, of 83 cents on revenue of $213 million.
Last month, ICE said combined average daily volume for its
futures exchanges rose 21% for the year, including 22% in the
fourth quarter. But it reported a 5% drop for January last
week.
At the over-the-counter energy markets, average daily
commissions fell 4.6% in the quarter.
ICE still needs approval from government regulators for a
credit-derivatives clearing platform with Clearing Corp., which it
is acquiring, as it looks for a share of what many believe will be
a huge market as investors try to unload the high-risk
securities.
But another clearing service for credit derivatives, launched in
December by London-based LCH.Clearnet and futures market Liffe,
hadn't executed a single trade by Jan. 23, despite expectations
that banks would use the system following regulatory pressure to
pare risk in the market.
ICE has said it will make a push into clearing more
over-the-counter energy products as counterparty risk in OTC
markets remains a top concern for investors.
Shares closed Monday at $62.26 and haven't traded premarket. The
stock is down 24% so far this year.
-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089;
kerry.grace@dowjones.com