(RTTNews) - North American stock exchange Nasdaq OMX Group Inc. (NDAQ: News ) on Thursday posted an increase in third-quarter profit, reflecting lower expenses and tax provision. However, non-GAAP profit fell 18% from last year, hurt by Cash Equity Trading performance.

Q3 Results

The New York-based firm's third-quarter net income attributable to Nasdaq OMX was $60 million or $0.28 per share, compared to $58 million or $0.27 per share in the year-ago quarter.

On a non-GAAP basis, net income attributable to Nasdaq OMX totaled $89 million or $0.42 per share, a decrease of 18%, compared to $108 million or $0.51 per share in the same quarter of last year.

On average, 18 analysts polled by Thomson Reuters expected the company to post earnings of $0.42 per share. Analysts' estimates typically exclude special items.

The latest quarter results excluded $25 million in debt conversion expense associated with the inducement provided to Silver Lake and another holder to convert their 3.75% convertible notes into common stock; $16 million in pre-tax expenses associated with asset retirements, workforce reductions, and other non-recurring items; and, $5 million in pre-tax merger expenses.

Revenues less liquidity rebates, brokerage, clearance and exchange fees or net exchange revenues fell 15% to $349 million from the previous year's net exchange revenues of $399 million, of which $14 million was due to changes in the exchange rates of various currencies as compared to the U.S. dollar. Fourteen Wall Street analysts had a consensus revenue estimate of $354.92 million for the quarter.
Adena Friedman, Chief Financial Officer of Nasdaq OMX, said, "During the third quarter, Nasdaq OMX continued to execute on a key priority of lowering total debt obligations. Through principal debt payments, repurchases of convertible notes, the conversion of convertible notes, as well as other actions, we have been able to reduce total debt obligations by approximately $452 million this year alone."

Market Services

Market Services net exchange revenues were down 21% to $230 million from $278 million reported in the third-quarter of 2008. Net exchange revenues from Transaction Services totaled $139 million for the recent quarter, down 27% from the prior-year's revenue of $178 million. Market Data revenues were $79 million, a decline of 9%, compared to $87 million reported in the comparable quarter of the previous year.

Cash Equity Trading net exchange revenues were $49 million, a decline of 52%, compared to $101 million reported in the third quarter of 2008, due primarily to declines in matched share volume and the average net fee per share matched on Nasdaq's trading system. Derivative trading net exchange revenues were down 4% to $54 million from $46 million in the previous year.

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