Nasdaq Tops Earnings Expectations While Revenue Slips

Earnings Reuters

Transatlantic exchange operator Nasdaq OMX Group Inc (NDAQ) on Friday reported a higher third-quarter profit, as lower expenses helped offset a decline in revenues driven in part by the impact of foreign exchange rates.

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Net income attributable to Nasdaq totaled $123 million, or 71 cents per share, up from $113 million, or 66 cents per share, a year earlier.

Excluding one-time items, the New York-based company earned 72 cents per share, beating the analysts' average estimate by 2 cents, according to Thomson Reuters I/B/E/S.

Revenue fell 2 percent to $497 million.

"Our unwavering focus on profitability led to declines in expenses, offsetting revenue headwinds from a number of discrete, temporary factors," said Chief Financial Officer Lee Shavel. Those factors included foreign exchange, a drop in data audit collections, and "certain planned revenue impacts in acquired businesses," he said in a statement.

Last year Nasdaq closed a $390 million deal to buy Thomson Reuters Corp's investor relations, public relations and multimedia services businesses. It also financed its $750 million purchase of eSpeed, the electronic Treasuries-trading platform, from BGC Partners Inc, a deal giving it a foothold in fixed income.

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Operating expenses fell by 5 percent $290 million.

The company said it lowered its non-GAAP operating expense guidance for 2014 to a range of $1.205 billion to $1.225 billion, down from the prior range of $1.220 billion to $1.250 billion.

Nasdaq purchased $27 million of stock during the period, along with another $35 million so far in October. The company said its board had authorized an additional $500 million of stock repurchases.

Market services revenue at Nasdaq fell 3 percent to $194 million. Of that segment, derivatives, fixed income and access and broker services revenues all declined, while cash equities revenues rose.

Technology solutions revenue, including corporate solutions and market technology, dipped 1.5 percent to $130 million.

Information services revenue, which includes market data and index licensing and services, fell 2.6 percent to $114 million.

Listing services revenues were up 3.5 percent at $59 million, as Nasdaq introduced 76 new listings in the quarter, including 41 initial public offerings.

(Reporting by John McCrank Editing by W Simon and Chizu Nomiyama)