Nasdaq OMX Group Inc.
) continued its earnings streak when it reported second-quarter
2014 results. With this, the company marked four straight quarters
of positive earnings surprise, with an average beat of 3.8%.
Second-quarter operating earnings per share came in at 70 cents,
which beat the Zacks Consensus Estimate of 68 cents and outpaced
the prior-year quarter figure of 62 cents.
Nasdaq Omx Group, Inc - Quarterly EPS (BNRI) |
Nasdaq's GAAP net income was $101 million or 59 cents per share,
substantially higher than $88 million or 52 cents per share in the
year-ago quarter. Excluding extraordinary items, operating net
income rose 14.3% to $120 million from $105 million in the year-ago
Total net exchange revenues escalated 16% year over year to $523
million, also exceeding the Zacks Consensus Estimate of $519
million. On a constant currency basis and excluding acquisitions,
revenues rose 4% in the reported quarter.
The improvement was primarily attributable to growth in the
non-trading business segments, which recorded organic growth of 9%.
Non-transaction-based revenues also accounted for 74% of total net
revenue and grew 19% from the prior-year quarter.
Theacquisitions of Thomson Reuters' IR, PR and Multimedia
businesses and the eSpeed electronic fixed income platform were
also accretive to the financials. While derivative volumes
continued to weaken, NASDAQ Private Market and NLX appear poised
for lucrative long-term opportunities.
net exchange revenues rose 6.3% from the year-ago period to $202
revenues were 3.4% higher at $60 million, while
revenues rose 15% to $123 million. Additionally,
revenues surged 43.8% to $138 million in the reported quarter.
However, Nasdaq's order intakes fell to $32 million from $45
million in the year-ago period. Conversely, total order value (the
value of orders signed that have not been recognized as revenues)
improved to $638 million from $512 million in the prior-year
quarter. New listings totaled 111 against 79 in the year-ago
Meanwhile, on a non-GAAP basis, core operating expenses were
$308 million, up 15.4% from the year-ago period. Nevertheless,
total operating income, on a non-GAAP basis, jumped 16.8% year over
year to $215 million. Consequently, operating margin improved
slightly to 41.1% from 40.8% in the year-ago quarter. On a GAAP
basis, operating expenses climbed 13.7% to $332 million.
As of Jun 30, 2014, Nasdaq had cash and cash equivalents of $314
million, down from $398 million at 2013-end. Debt obligations of
Nasdaq stood at $2.41 billion, down from $2.59 billion at 2013-end.
The company paid $100 million of debt in the reported quarter and
the same worth $221 million was repaid in the first half of
Total assets of Nasdaq increased to $13.12 billion from $12.58
billion at 2013-end, while total equity improved to $6.21 billion
from $6.18 billion at 2013-end.
Capital Deployment Update
Nasdaq repurchased shares worth $93 million, for an average
price of $36.46, during the reported quarter.
On Jul 24, 2014, the board of Nasdaq declared a regular dividend
of 15 cents a share, payable on Sep 26, 2014, to shareholders of
record as on Sep 12.
On Jun 27, 2014, Nasdaq paid a cash dividend of 15 cents per
share to shareholders of record as on Jun 13. The payout marked an
increase of 15% from 13 cents a share in Mar 2014.
Guidance for 2014
In Jan 2014, Nasdaq projected core operating expense of
$1.215-1.235 billion in 2014. Additionally, the company expects
approximately $35-50 million of incremental expenses from new
initiative or GIFT spending in 2014.
Including these charges, total expenses are projected to be
$1.250-1.285 billion. Tax rate is anticipated in the band of 33-35%
Other Stocks to Consider
Nasdaq presently carries a Zacks Rank #4 (Sell). Better-ranked
financial stocks include
Total System Services Inc.
VeriFone Systems Inc.
), all of which sport a Zacks Rank #1 (Strong Buy).
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