ISE Earnings Estimates May Be Low

If you just looked at the headline numbers for the Chicago Merc (CME) this morning, you would have missed something important.  There are 10 analysts covering CME, a large and well-known bourse that like most publicly-traded exchanges set many volume records in the 1^st quarter.

Estimates for the March quarter at CME were originally for $3.32 EPS two months ago, but had been adjusted up to their final level of $3.62 this morning.  That’s a 10% increase in two months. CME stock now trades for about 35x this year’s earnings, and 47x trailing earnings, even after today’s sell-off. The shares are slightly off on earnings news.

Over at the CBOT (BOT), earnings released last Thursday showed a 58% rise in profits on a 34% rise in revenues, allowing it to stay near 52-week highs on a current multiple of 38.6x.

Over at International Securities Exchange (ISE), who reports 1^st quarter earnings tomorrow, estimates are basically unchanged, up $0.02 from $0.43 to $0.45 in the past two months.  Revenue growth is expected to come in at 16.7%, but this doesn’t account for average volumes up over 25% here during the past quarter.  ISE stock is a bit cheaper than the Chicago exchanges, and goes for 25x 2007 estimates.  Here’s what we said about the company after it reported record March volumes.

NYMEX (NMX) reports on May 1^st, and although there isn’t much EPS history to compare against, estimates have moved up 10% from $0.52 to $0.57 in the past two months.  NMX reported EPS of $0.46 in the December quarter, and the stock currently trades for 46x 2007 estimates

And over at the InterContinental Exchange (ICE) – who currently has the high bid of $9.9 for the CBOT – earnings estimates are actually down 10%, from $0.80 to $0.72 since February.  Some charges are expected here when the company releases earnings on May 2^nd, as they are still integrating the NYBOT purchase from last November.  ICE shares trade for 40x current and 24x forward estimates, although if the BOT offer is approved, all existing estimates will be thrown out the window. 

Ryan Barnes

April 24, 2007

Ryan Barnes can be reached at [email protected]; he does not own securities in the companies he covers.