Nasdaq OMX Group Inc.
) reported second-quarter 2013 operating earnings per share of 62
cents. The result beat the Zacks Consensus Estimate by a penny
but missed the prior-year quarter earnings of 64 cents.
Nasdaq's GAAP net income was $88 million or 52 cents per
share, lower than $93 million or 53 cents per share recorded in
the year-ago quarter. Results in the reported quarter included
net after-tax charge of $17 million or 10 cents per share,
primarily related to merger and strategic initiatives.
Excluding these, net income was $105 million, lower than $111
million recorded in the year-ago quarter. Meanwhile, total
operating income, on a non-GAAP basis, was at par with the year
over year figure of $184 million..
Total net operating exchange revenues increased 8.4% year over
year to $451 million, and exceeded the Zacks Consensus Estimate
of $443 million. On a constant currency basis and excluding
acquisitions, revenues grew 1% year over year in the reported
The growth was primarily attributable to improved revenues
from listing, information, technology and derivatives, all driven
by the recent acquisitions. However, revenues from market
services continued to witness weakness owing to lower revenues
from cash equities, access and broker services. While trading
volumes saw some improvement after several quarters of decline,
rate per contract continued to remain feeble.
net exchange revenues for the quarter declined 4.5% from the
year-ago period to $190 million, based on slashed revenues,
partially offset by lower cost of revenues.
revenues for the reported quarter were $58 million, up 5.5% from
the year-ago period, on the back of improvement in both the U.S.
and Europe markets.Revenues from
inched up 1.9% to $108 million, whereas
revenues stood at $95 million, surging 41.8% from the year-ago
During the reported quarter, Nasdaq's order intakes plunged to
$44 million from $82 million in the year-ago quarter. Equally,
total order value (the value of orders signed that have not been
recognized as revenues) deteriorated to $507 million from $538
million in the prior-year quarter. New listings totaled 79
against 31 in the year-ago quarter.
Meanwhile, on a non-GAAP basis, operating expenses stood at
$267 million, up 15.1% from the year-ago period. On a GAAP basis,
total operating expenses climbed 15.9% to $292 million from $252
million in the year-ago period, primarily spurred by higher
operating costs and expenses related to merger and strategic
initiatives. Consequently, core operating margin dipped to 41%
from 44% in the year-ago quarter, led by higher expenses.
As of Jun 30, 2013, Nasdaq had cash and cash equivalents of
$379 million, down from $497 million at the end of 2012. Debt
obligations stood at $2.65 billion, up from $1.84 billion at
2012-end. Total assets increased to $11.95 billion from $9.13
billion at 2012-end, while total equity improved to $5.86 billion
from $5.21 billion in 2012.
Management revealed core operating expense projection of
$925-940 million. Additionally, the company expects approximately
$50-60 million of incremental expenses from new initiative
spending and $145-160 million from the recent acquisitions of
eSpeed and the corporate arm of Thomson Reuters. Including these
charges, total operating expenses are projected within $1.12-1.16
Concurrently, the board declared a cash dividend of 13 cents
per share, which is payable on Sep 27, 2013 to shareholders of
record as on Sep 13, 2013.
On Jun 28, 2013, Nasdaq paid a cash dividend of 13 cents per
share to shareholders of record as on Jun 14, 2013.
Nasdaq carries a Zacks Rank #3 (Hold). Meanwhile, another
dominant player of the exchange industry -
CME Group Inc.
), a Zacks Rank #1 (Strong Buy) stock, is slated to release its
results before the market opens on Aug 1, 2013. Other
outperformers of this industry include
MarketAxess Holdings Inc.
), a Zacks Rank #1 (Strong Buy) stock, and
CBOE Holdings Inc.
), which carries a Zacks Rank #2 (Buy).
CBOE HOLDINGS (CBOE): Free Stock Analysis
CME GROUP INC (CME): Free Stock Analysis
MARKETAXESS HLD (MKTX): Free Stock Analysis
NASDAQ OMX GRP (NDAQ): Free Stock Analysis
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