NYSE Euronext Inc.
) fourth-quarter 2011 operating earnings per share of 50 cents came
in a penny ahead of the Zacks Consensus Estimate and slightly
higher than 46 cents recorded in the year-ago quarter.
Consequently, operating net income climbed 12.8% year over year to
$212 million from $188 million in the year-ago quarter.
NYSE reported GAAP net income of $110 million or 43 cents per
share as compared with $135 million or 51 cents per share in the
prior-year quarter. These include the impact of pre-tax merger
expenses and exit costs of $46 million related to Deutsche Boerse
versus $18 million in the year-ago quarter and BlueNext tax
settlement charge of $42 million. These were partially offset by
tax benefit of $47 million in the reported quarter.
Gross revenues crawled up 0.9% year over year to $1.05 billion
in the reported quarter. Meanwhile, net revenues (defined as gross
revenues less direct transaction costs consisting of Section 31
fees, liquidity payments and routing and clearing fees) were $628
million, edging up 2.4% from $613 million in the prior-year quarter
and the Zacks Consensus Estimate of $631 million.
The improved performance was primarily spurred by higher
technology service revenue that escalated 15.9% to $95 million,
listing revenue that climbed 4.7% to $112 million, and other
revenue also enhanced by 16.7% year over year to $56 million.
However, these were offset by transaction and clearing fees that
inched down 1.7% year over year to $701 million and market data
revenue that declined 5.3% year over year to $90 million.
Revenue from derivatives also dipped 1.1% year over year to $186
million. Nevertheless, revenue growth was injected by information
service and technology solutions (up 11.4% year over year to $127
million) and cash trading and listings (up 1.6% year over year to
Overall, top-line results reflected declining volumes in
European derivatives and US cash trading along with unfavorable
currency fluctuations, which was partially cushioned by modest
growth in US equity options and higher average revenue per
Alongside, fixed operating expenses escalated 13.8% year over
year to $504 million. As a result, operating margin improved to 34%
from 31% in the year-ago quarter. At the end of 2011, total
headcount at NYSE was 3,077, marginally up from 3,074 as of
September 30, 2011 and 4% from December 31, 2010. The effective tax
rate was 25.75% as compared with 26.50% in the year-ago quarter and
in line with management's guidance for 2011.
Full-Year 2011 Highlights
For full-year 2011, NYSE recorded operating earnings of $1.0
billion or $2.48 per share against $833 million or $2.09 per share
in 2010. This, however, came in slightly below the Zacks Consensus
Estimate of $2.51 per share.
Besides, GAAP net income increased to $619 million or $2.36 per
share as opposed to $577 million or $2.20 per share in 2010.
Gross revenues edged up 3% over 2010 to $4.55 billion in 2011.
Meanwhile, net revenues were $2.67 billion, rising 6% from $2.51
billion in 2010 but marginally lagged the Zacks Consensus Estimate
of $2.68 billion. Total operating expenses inched up 3.2% year over
year to $1.82 billion, while operating margin improved to 38% from
33% in 2010.
Moreover, in 2011, NYSE raised $33.5 billion in total global
proceeds from 104 initial public offerings (IPOs) on its European
and US markets, more than any global exchange group.
As of December 31, 2011, NYSE's total debt declined $0.3 million
from 2010 end to $2.1 billion. At the end of 2011, cash and cash
equivalents, investments and other securities were $0.4 billion
while net debt was $1.7 billion.
Total capital expenditure declined to $54 million from $61
million recorded in the year-ago quarter. The company expended $170
million in 2011, down by 44% from $305 million in 2010, and in line
with management's guidance of below $200 million. No shares were
repurchased during the reported quarter, given the collapse of a
merger with Deutsche Boerse.
As a result of strong growth in adjusted EBITDA, lower capital
expenditures and continued deleveraging, NYSE's debt-to-EBITDA
ratio improved to 1.6x from 2.2x recorded at the end of 2010,
lowest level since the inception of NYSE in April 2007.
Stock Repurchase Update
As announced in October 2011, NYSE bought back 3.7 million
shares during the reported quarter, at an average price of $26.96
per share, for $100 million.
Thus, the company has resumed its $1.0 billion share buy back
plan, which was sanctioned in March 2008 but shelved in the fourth
quarter of 2008, within which the company had already bought back
shares worth $350 million.
While NYSE terminated its proposed merger with Deutsche Boerse
recently on regulatory snags, management is expected to declare a
two-year target plan in April this year. This plan is
projected to drive accelerated earnings growth through a blend of
top-line growth initiatives, which includes diversification of
growth into non-core space of information and technology.
Additionally, NYSE looks forward to a disciplined cost
management and healthy capital deployment. While the outlook for
trading volumes and currencies remains cautious in the near term,
the company believes a modest improvement in the operating
environment should initiate progress.
Concurrently, the board of NYSE declared a regular quarterly
dividend of 30 cents per share, which is payable on March 30, 2012,
to the shareholders of record as on March 15, 2012.
Furthermore, on December 30, 2011, NYSE paid a quarterly cash
dividend of 30 cents to shareholders of record as on December 15,
Early this month, NYSE's arch-rival
Nasdaq OMX Group Inc.
) reported its fourth-quarter 2011 operating earnings per share of
63 cents, which came in a nickel below the Zacks Consensus
Estimate. However, results were modestly ahead of 55 cents in the
prior-year quarter, based on lower share count.
Besides, early this week,
) reported fourth-quarter 2011 operating earnings of $1.76 per
share, which were significantly ahead of the Zacks Consensus
Estimate of $1.68 per share and $1.35 per share reported in the
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