Stock exchange operator Nasdaq OMX Group Inc. (NDAQ) on Monday reported a 23% increase in profit for the fourth quarter from last year, aided by a gain on sale of businesses, lower expenses and a tax benefit. However, adjusted earnings per share for the quarter declined 12% from the prior-year period. Revenues for the fourth quarter, less liquidity rebates, brokerage, clearance and exchange fees, declined 8%.
Net income attributable to Nasdaq OMX for the fourth quarter was $43 million or $0.20 per share, up from $35 million or $0.17 per share in the year-ago quarter. However, net income declined from $60 million or $0.28 per share in the preceding third quarter.
The results for the latest quarter include $51 million of impairment charges related to unconsolidated investees, net of tax, $16 million in pre-tax expenses associated with occupancy sub-lease reserves workforce reductions, and $12 million of pre-tax gains on the sale of certain businesses. The latest quarter's results also include a tax benefit of $5 million or $0.02 per share on a Swedish tax benefit. On a non-GAAP basis, net income attributable to Nasdaq OMX for the fourth quarter declined to $99 million or $0.46 per share from $110 million or $0.52 per share a year ago, but increased from $89 million or $0.42 per share in the prior quarter. On average, twenty analysts polled by Thomson Reuters expected the company to post earnings of $0.45 per share. Analysts' estimates typically exclude special items.
Revenues for the fourth quarter, less liquidity rebates, brokerage, clearance and exchange fees or net exchange revenues declined 8% to $369 million from $403 million a year ago. Analysts had a consensus revenue estimate of $364.58 million for the quarter.
Market Services net exchange revenues for the quarter declined 14% from the year-ago period to $240 million, but increased 4% from the previous quarter. Of this, net exchange revenues from transaction services totaled $150 million for the recent quarter, down 17% from the prior-year quarter. Total market data revenues declined to $83 million from $85 million in the year-ago period. Broker services revenues dropped 45% from last year to $6 million.
Of the total transaction service revenues, cash equity trading net exchange revenues dropped 43% to $54 million, while net derivative trading and clearing exchange revenues for the quarter increased 6% to $57 million. Access services revenues increased 22% from the same period last year to $39 million.
Net U.S. cash equity trading revenues decreased from the prior-year quarter due primarily to declines in matched share volume and lower average net fee per share matched on NASDAQ's trading system. European cash equity trading revenues declined from the year-ago period, primarily due to a decline in value traded, which dropped from to Euro 139 billion from Euro 170 billion in the prior-year quarter.
Issuer Services revenues for the fourth quarter were $82 million, down 4% from the year-ago period. Of this, global listing services revenue also declined 4% from last year to $72 million, primarily due to the sale of Carpenter Moore, the company's insurance brokerage business, and on lower US annual renewal fees resulting from fewer listed companies. However, Global Index Group revenues were flat with the year-ago period at $10 million.
Market technology revenues climbed 26% from the year-ago period to $44 million, primarily due to the increased deliveries of market technology contracts and changes in the exchange rates of various currencies as compared to the U.S. dollar.
Total operating expenses for the quarter declined to $220 million from $223 million in the previous-year quarter. On a non-GAAP basis, operating expenses declined 4% from the prior-year period on a reduction in compensation expense and lower general, administrative and other expense. The reductions were driven by successful integration efforts associated with Nasdaq's business combination with OMX and acquisition of the Philadelphia Stock Exchange.
Operating income for the quarter declined to $149 million from $180 million in the same period last year.
For fiscal year 2009, net income attributable to Nasdaq OMX declined to $266 million or $1.25 per share from $314 million or $1.55 per share in the previous year.
The results for the latest year include a tax benefit of $19 million or $0.09 per share related to the Swedish tax benefit. Analysts expected the company to report earnings of $1.81 per share for the year.
Total revenues for the year, less liquidity rebates, brokerage, clearance and exchange fees were $1.45 billion, down from $1.46 billion in the prior year. Wall Street analysts had a consensus revenue estimate for the year of $1.45 billion.
For fiscal year 2010, Nasdaq OMX forecasts total operating expenses in a range of $865 million-$885 million, including about $50 million in non-recurring costs.
The company also said it expects to record recurring quarterly tax benefits of $4 million-$5 million with respect to the Swedish tax benefit for the foreseeable future.
In mid-January, Nasdaq OMX announced the closing of its $1 billion underwritten public offering of its senior notes and its $950 million senior unsecured credit facility. The new credit facility includes a $700 million funded term loan a $250 million unfunded revolver. The company used net proceeds from the senior notes offering, the funded term loan and cash on hand to repay all amounts outstanding under its existing senior secured credit facilities and terminated the associated credit agreement.
Adena Friedman, Chief Financial Officer of Nasdaq said on Monday, "The strong cash flow of our diverse business model recently provided us with an opportunity to refinance our outstanding credit facility at extremely favorable terms. The terms of the new debt provide us with increased flexibility in our capital management decisions while reducing our interest rate exposure. Additionally, the recent upgrades of our debt ratings speak to our sound financial policy and to the fact that we delivered on the promises of our integration efforts and improved the efficiency of our operations."
Among Nasdaq OMX's rivals, CME Group Inc. (CME) last Thursday reported a profit for the fourth quarter that soared from last year as lower impairment charges offset a decline in revenues. Additionally, the prior-year's results include certain charges related to the company's acquisition of the New York Mercantile Exchange, or Nymex. The Chicago, Illinois-based company's net income for the fourth quarter was $202.6 million or $3.04 per share, up from $62.1 million or $0.93 per share last year. Total revenues for the quarter were $667.5 million, down 4% from $691.8 million a year ago.
NYSE Euronext Inc. (NYX) is slated to report its financial results for the fourth quarter on February 9, 2010. Analysts expect the company to report earnings of $0.48 per share for the fourth quarter on revenues of $638.32 million.
n Monday's regular trading session, NDAQ is trading at $18.67, down $0.13 or 0.69%. In the past 52 weeks, the stock has been trading in a range of $17.51-$25.07.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.