Nasdaq OMX Group Inc.
) first-quarter 2013 operating earnings per share of 64 cents
modestly surpassed the Zacks Consensus Estimate as well as the
prior-year quarter earnings of 61 cents.
Nasdaq's GAAP net income was $42 million or 25 cents per
share, quite lower than $85 million or 48 cents per share
recorded in the year-ago quarter. Results in the reported quarter
included net after-tax charge of $66 million or 39 cents per
share, primarily related to voluntary accommodation program,
asset impairments, special legal expenses, reserve for SEC issue
along with merger and strategic initiatives, restructuring and
other items partially offset by a tax refund.
Excluding these, net income was $108 million, on par with the
year-ago quarter. Meanwhile, total operating income, on a
non-GAAP basis, slipped 0.5% year over year to $181 million.
Total net exchange revenues edged up 1% year over year to $418
million, but lagged the Zacks Consensus Estimate of $426 million.
On a constant currency basis and excluding acquisitions, revenue
declined 2% year over year in the reported quarter. The marginal
growth was primarily attributable to improved information and
However, revenue from market services and listings continue to
witness weakness. Additionally, cash equities and derivatives
continued to be feeble based on lower industry trading volumes,
rate per contract and market share, although market data revenue
net exchange revenues for the quarter declined 4.2% from the
year-ago period to $182 million, based on slashed revenues,
partially offset by lower cost of revenues.
revenues for the reported quarter were $55 million, down 1.8%
from the year-ago period, on the back of lower fees and weakness
in the U.S. market.Revenue from
increased 59% to $108 million, whereas
revenues stood at $73 million, rising 10.6% from the year-ago
During the reported quarter, Nasdaq's order intakes plunged to
$19 million from $55 million in the year-ago quarter. Conversely,
total order value (the value of orders signed that have not been
recognized as revenue) improved to $524 million from $496 million
in the prior-year quarter. New listings totaled 37 against 46 in
the year-ago quarter.
Meanwhile, on a non-GAAP basis, operating expenses stood at
$237 million, up 2.2% from the year-ago period. On a GAAP basis,
total operating expenses surged 35% to $328 million from $243
million in the year-ago period, primarily spurred by higher
operating costs and expense related to voluntary accommodation
program. Consequently, core operating margin dipped to 43% from
44% in the year-ago quarter, led by a faltered top line.
As of Mar 31, 2013, Nasdaq had cash and cash equivalents of
$591 million, up from $497 million at the end of 2012. Debt
obligations stood at $1.83 billion, down from $1.84 billion at
2012-end. Total assets increased to $9.19 billion from $9.13
billion at 2012-end, while total equity dipped marginally to
$5.20 billion from $5.21 billion in 2012.
On Oct 12, 2011, Nasdaq declared a new capital plan, according
to which the board approved a new stock repurchase program worth
$300 million through open market operations. Accordingly, the
company bought back 0.3 million shares for $10 million during the
Including this, Nasdaq deployed $1.18 billion in share
repurchases since Jan 2010, thereby buying back 53.7 million
shares at an average price of $22.03.
Management revealed core operating expense projection of
$910-930 million. Additionally, the company expects approximately
$50-60 million of incremental expenses from new initiative
spending and $12 million from certain corporate solution
expenses. Including these charges, total operating expenses are
projected within $972-1,002 million.
However, the cost guidance excludes a restructuring expense
related to the latest new cost reduction plan and expenses
related to the acquisitions of eSpeed and the corporate arm of
Thomson Reuters. Tax rate was previously anticipated in the band
Concurrently, the board declared a cash dividend of 13 cents
per share, which is payable on Jun 28, 2013 to the shareholders
of record as on Jun 14, 2013.
On Mar 28, 2013, Nasdaq paid a cash dividend of 13 cents per
share to the shareholders of record as on Mar 14, 2013.
Nasdaq carries a Zacks Rank #4 (Sell). Meanwhile, another
player of the exchange industry -
CBOE Holdings Inc.
), a Zacks Rank #2 (Buy) stock, is slated to release its earnings
results before the market opens on May 3, 2013. Other strong
performers in the financial sector include
Western Alliance Bancorp.
), both of which carry Zacks Rank #1 (Strong Buy).
CBOE HOLDINGS (CBOE): Free Stock Analysis
MOODYS CORP (MCO): Free Stock Analysis Report
NASDAQ OMX GRP (NDAQ): Free Stock Analysis
WESTERN ALLIANC (WAL): Free Stock Analysis
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