ICE's Volume, Profit on Fire

Futures exchange operator InterContinental Exchange(ICE - Cramer's Take - Stockpickr) on Friday reported first-quarter profits jumped 66% on record trading volume.

The exchange operator posted net income of $92.3 million, or $1.29 a diluted share, vs. $55.6 million, or 80 cents a diluted share in the year ago period. The results, which exclude a 2-cents-a-share charge from closing the futures pits at ICE Futures U.S., beat the $1.27-a-share consensus figure reported by Thomson Financial.

The total average daily volume for futures contracts was 863,325 in April, vs. 755,474 in April 2007. The commissions for InterContinental's global over-the-counter business skyrocketed 96% over last April.

Consolidated transaction revenues increased 62% to $177.4 million in the first quarter, from $109.3 million in the first quarter last year. The increase in transaction revenue was driven primarily by new products, strong trading volume in its futures and global OTC segments, and the entry of new participants in InterContinental's markets.

"We have numerous initiatives underway to support growth across new and existing asset classes," Chairman and CEO Jeffrey Sprecher said in a company statement. "Our organic growth remains strong despite the broader credit market issues over the past three quarters, and we have experienced record transaction volume in our markets this year."

Operating expenses did increase 34% as a result of closing the futures pits and costs associated with the establishment of ICE Clear Europe, which is expected to go live in July 2008. The $7 million facility will be the first new major London derivatives clearing house in over a hundred years.