NYSE Euronext Profit More Than Doubles on Robust Trading
NYSE Euronext, the world's largest stock exchange, on Thursday reported second-quarter profit more than doubled on record trading and a significant boost from its European operations.
Profit for the three months through June 30 rose to $161 million, or 62 cents per share, from $61 million, or 39 cents per share, a year earlier. Adjusted as if the exchanges has been merged in the year-ago quarter, NYSE Euronext's profit would have climbed 29% to $172 million, or 65 cents per share, from $133 million, or 50 cents per share.
Strength from NYSE Euronext's cash and derivatives trading in Europe -- as well as listings and market data -- pushed revenue up 63% to $1.08 billion from $660 million a year ago.
Analysts polled by Thomson Financial had expected earnings of 64 cents a share and revenue of about $805 million.
Shares fell $1.89, more than 2%, to $75.09 in afternoon trading.
Company officials said they were pleased about performance.
"These results show the balance and growth of our business, and our market position is unlike anybody else's," said NYSE Euronext Chief Financial Officer Nelson Chai. "You're now seeing the benefits of the merger."
The NYSE closed its deal in April to form the world's first trans-Atlantic stock exchange with the acquisition of Paris-based Euronext. This quarter's result was the first time the company reported as a combined entity.
The NYSE also led a group of investors in acquiring a 20% stake in India's National Stock Market. In addition, Chief Executive John Thain parlayed a friendship with his counterpart at the Tokyo Stock Exchange to broaden an alliance between those two entities.
There has been talk that NYSE Euronext might be looking to strike one more deal this year. Thain has said in the past he wants to expand in options trading, as well as commodities.
Analysts have said the most likely takeover candidates would be the New York Mercantile Exchange or Atlanta-based Intercontinental Exchange . Speculation about a deal has weighed on the company's stock price, especially amid a wave of consolidation among NYSE Euronext's rivals.
Nasdaq Stock Market, which has increasingly taken market share from the NYSE, announced earlier this year it would buy Nordic exchange operator OMX after its bid to buy the London Stock Exchange failed.
Chai said the exchange continues to look at acquisitions, but is in no rush. NYSE Euronext was most recently in talks with Italian exchange operator Borsa Italiana, which later agreed to be acquired by the London Stock Exchange.
"There's a lot of discussion about consolidation, and we're having lots of conversations," he said. "The reality is we've been very clear about our strategy. We will work hard to grow the business organically. But, if opportunities come across, we'll be disciplined."