NASDAQ OMX Group Inc.
) second-quarter 2012 operating earnings per share of 64 cents
surpassed the Zacks Consensus Estimate of 60 cents and the
prior-year quarter's earnings of 62 cents a share.
NASDAQ's GAAP net income came in at $93 million or 53 cents per
share, slightly ahead of $92 million or 51 cents per share recorded
in the year-ago quarter. Results in the reported quarter included
net charge of $18 million or 11 cents per share, primarily related
to asset impairment, restructuring and other items, along with
merger and strategic initiatives.
Excluding these, net income was $111 million compared with $112
million in the year-ago quarter. Meanwhile, total operating income,
on non-GAAP basis, slipped 1.6% year over year to $184 million.
Total net exchange revenues edged up 2.2% year over year to $424
million, and also surpassed the Zacks Consensus Estimate of $416
million. The upside was primarily attributable to improved revenue
from market services, although issuer services and market
technology revenues remained sluggish.
Additionally, cash equities and derivative continued to be
feeble based on lower industry trading volumes and unfavorable
impact from foreign exchange.
net exchange revenues for the quarter climbed 4.3% from the
year-ago period to $289 million, based on lower cost of
revenues for the reported quarter were $91 million that inched down
from $92 million in the year-ago period on the back of higher
global index group and corporate solutions, which were offset by
lower global listing services revenue.
revenues declined to $44 million from $46 million in the year-ago
During the reported quarter, NASDAQ's order intakes soared to
$77 million from $56 million in the year-ago quarter. Consequently,
total order value (the value of orders signed that have not been
recognized as revenue) strengthened to $529 million from $483
million in the prior-year quarter.
Meanwhile, on a non-GAAP basis, operating expenses marginally
rose to $229 million from $228 million in the year-ago period,
primarily spurred by higher general and administrative expenses,
and incremental spending for professional and contract
Consequently, operating margin was at par with the year-ago
quarter at 45%. On a GAAP basis, total operating expenses dipped
3.1% year over year to $249 million.
As of June 30, 2012, NASDAQ had cash and cash equivalents of
$491 million, down from $506 million at the end of 2011. Debt
obligations stood at $1.95 billion, down from $2.07 billion at
2011-end. Total assets decreased to $8.93 billion from $14.09
billion at 2011-end, whereas total equity dipped to $4.97 billion
from $4.99 billion at the end of 2011.
On October 12, 2011, NASDAQ declared a new capital plan,
according to which the board of NASDAQ approved a new stock
repurchase program worth $300 million through open market
Accordingly, NASDAQ bought back 5.3 million shares for $125
million during the reported quarter. Including this, the company
has deployed $1.07 million in share repurchases since January 2009,
thereby buying back 49.1 million shares at an average price of
During the reported quarter, NASDAQ also deployed cash of about
$57 million to acquire a majority interest in BWise - a leader in
enterprise governance, risk management and compliance software.
For 2012, NASDAQ management further lowered the operating
expense outlook to the range of $870-890 million from the prior
projection of $880-900 million. This excludes approximately $40-50
million of incremental expenses from new initiative spending, and
about $25 million related to BWise and NOS acquisitions. However,
including these charges, total operating expenses are projected to
be within $935-965 million.
Previously, NASDAQ stated that the new cost reduction plan aims
to generate cost savings at an annualized run rate of $50 million
by the end of 2012, with $25 million to be realized in 2012. This
is reflected in the company's revised expense outlook, although it
excludes a restructuring expense related to this plan and voluntary
Concurrently, the board of NASDAQ declared a cash dividend of 13
cents per share, which will be paid on September 28, 2012 to the
shareholders of record as on September 18, 2012.
On April 25, 2012, NASDAQ initiated a cash dividend of 13 cents
per share, which was paid on June 29, 2012 to the shareholders of
record as on June 15, 2012. This marked the first dividend payment
in the company's history.
During the reported quarter, NASDAQ processed 15 initial public
offerings (IPOs) versus 30 in the year-ago period, while new
listings totaled 31 against 53 in the year-ago
Meanwhile, NASDAQ's arch-rival
NYSE Euronext Inc.
) is slated to release its earnings results before the market opens
on August 3, 2012.
NASDAQ OMX GRP (NDAQ): Free Stock Analysis
NYSE EURONEXT (NYX): Free Stock Analysis Report
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