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NYSE Euronext Q4 Profit Declines, Adj. Earnings Top View


NYSE Euronext (NYX), which has agreed to be bought by IntercontinentalExchange Inc. (ICE) in an $8.2 billion cash and stock deal, on Tuesday reported a plunge in fourth-quarter profit, as revenues declined sharply owing to lower average daily volumes. Adjusted earnings for the parent of the New York Stock Exchange fell year-over-year, but topped Wall Street expectations.

Net income attributable to the company plunged to $28 million or $0.12 per share from $110 million or $0.43 per share in the prior-year quarter.

The latest results included a higher level of merger and exit costs, the unwind of BlueNext and merger related expenses. The results also included costs of $24 million, consisting mainly of the premium paid to former bondholders, to refinance a portion of company debt outstanding.

Excluding items, net income was $105 million or $0.43 per share in the latest quarter. Adjusted earnings amounted to $130 million or $0.50 per share last year. On average, 14 analysts polled by Thomson Reuters expected earnings per share of $0.38 for the quarter. Analysts' estimates typically exclude one-time items.

New York-based NYSE Euronext operates various stock exchanges, including the New York Stock Exchange, NYSE Arca, Inc., and NYSE Amex LLC in the U.S,. and five Europe-based exchanges that comprise Euronext N.V.

Total revenues, less transaction-based expenses, dropped 11 percent to $562 million and included a $4 million negative impact from foreign currency fluctuations. Analysts estimated revenues of $555.30 million for the quarter.

Including activity assessment fees, total revenues declined 14 percent to $909 million.

On a constant currency basis, revenue decline was primarily driven by lower average daily volumes or ADV, mostly attributable to the derivatives business.

Duncan Niederauer, CEO, said, ''Our fourth quarter results reflect both the beneficial actions we took to refinance our debt and rationalize our clearing plans for Liffe in connection with the announced move to ICE Clear."

The company noted that the fourth quarter results were in line with the third quarter, although it trailed the prior year. The impact of lackluster trading volumes was somewhat mitigated by lower costs and lower share count, the exchange operator added.

In the Derivatives business, net revenue fell 14 percent to $160 million and included a $1 million positive impact from foreign currency fluctuations, amid lower ADV.

Cash Trading and Listings net revenue dropped 10 percent to $282 million, as ADV declined.

Information Services and Technology Solutions revenue dropped 6 percent to $120 million, including a $2 million negative impact from foreign currency fluctuations.

The Board of Directors declared a cash dividend of $0.30 per share for the first quarter of 2013.

NYX closed at $34.87 on Monday.

by RTTNews Staff Writer

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