NASDAQ OMX Group Inc.
) first-quarter 2012 operating earnings per share of 61 cents fell
shy of the Zacks Consensus Estimate of 63 cents, but were in line
with the prior-year quarter's earnings.
NASDAQ's GAAP net income came in at $85 million or 48 cents per
share, lagging behind $104 million or 57 cents per share recorded
in the year-ago quarter. Results in the reported quarter included
net charge of $23 million or 13 cents per share, primarily related
to debt extinguishment, asset impairment, restructuring and other
items along with merger and strategic initiatives.
Excluding these, net income was $108 million compared with $110
million in the year-ago quarter. Total operating income on non-GAAP
basis declined 5.2% year over year to $182 million.
Total net exchange revenues edged down 0.5% year over year to
$411 million, also lagging behind the Zacks Consensus Estimate of
$421 million. The downside was primarily attributable to reduced
revenue from market services, weak volumes and continued
sluggishness in cash equity and derivative trading. These were
partially supported by modest growth in market data, issuer
services and market technology revenues.
net exchange revenues for the quarter edged down 1.8% from the
year-ago period to $276 million, based on poor transaction
revenues for the reported quarter were $90 million, inching up 1.1%
from the year-ago period on the back of flattish-to-slight uptick
from global index group and corporate solutions, partially offset
by lower global listing services revenue.
revenues climbed 4.7% year over year to $45 million.
During the reported quarter, NASDAQ's order intakes sharply
soared to $55 million from $6 million in the year-ago quarter.
Consequently, total order value (the value of orders signed that
have not been recognized as revenue) strengthened to $496 million
from $471 million in the prior-year quarter.
Meanwhile, on non-GAAP basis, operating expenses increased 3.6%
from the prior-year period to $229 million, primarily spurred by
higher marketing and advertising expenses, and incremental spending
for professional and contract services. Consequently, operating
margin slipped to 44% from 46% in the year-ago quarter. On a GAAP
basis, total operating expenses climbed 4.2% year over year to $230
As of March 31, 2012, NASDAQ had cash and cash equivalents of
$525 million, substantially up from $506 million at the end of
2011. Debt obligations stood at $2.07 billion, at par with 2011-end
levels. While total assets decreased to $9.02 billion from $14.09
billion at 2011-end, total equity increased to $5.16 billion from
$4.99 billion at the end of 2011.
On October 12, 2011, the board of NASDAQ approved a new stock
repurchase program worth $300 million through open market
operations. NASDAQ bought back 1.9 million shares for $50 million
during the reported quarter. Including this, the company has
deployed $950 million in share repurchases since January 2009,
buying back 43.7 million shares at an average price of $21.66.
Moreover, according to new regulations proposed by the European
Market Infrastructure Regulation (EMIR), recently NASDAQ's Nordic
Clearing executed a member default fund, whereby the clearing
members are required to contribute to the total regulatory
As of March 31, 2012, total member contributions stood at $163
million, of which $145 million were cash contributions.
Subsequently, NASDAQ released $83 million in clearing capital, with
an additional estimated $30 million to be released in the second
quarter of 2012.
For 2012, NASDAQ management further lowered its operating
expense outlook to the range of $880-900 million from the prior
projection of $915-935 million. This excludes approximately $40-50
million of incremental expenses from new initiative spending.
However, including these charges, total operating expenses are
projected to be within $920-950 million.
Additionally, NASDAQ's 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 of $30 million related to this plan.
Concurrently, the board of NASDAQ initiated a cash dividend of
13 cents per share, which is to be paid on June 29, 2012 to the
shareholders of record as on June 15, 2012. This marks the first
dividend payment in the company's history.
During the reported quarter, NASDAQ processed 21 initial public
offerings (IPOs), while new listings totaled 43 against 34 in the
Meanwhile, NASDAQ's arch-rival
NYSE Euronext Inc.
) is slated to release its earnings results before the market opens
on April 30, 2012.
NASDAQ OMX GRP (
): Free Stock Analysis Report
NYSE EURONEXT (
): Free Stock Analysis Report
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