Nasdaq OMX Group Inc. said Thursday its first-quarter profit fell 22 percent compared with a year-ago quarter where it booked hefty gains on foreign currency contracts.
Nasdaq OMX Group Inc. said Thursday its first-quarter profit fell 22 percent compared with a year-ago quarter where it booked hefty gains on foreign currency contracts.
The global exchange operator earned $94 million, or 44 cents per share, during the quarter ended March 31, compared with earnings of $121 million, or 69 cents per share, during the same quarter last year.
During the year-ago period, Nasdaq OMX Group booked $35 million in income from foreign currency contracts, helping to bolster its earnings. The exchange operator did not book any gains or losses on such contracts during the most recent quarter, helping to push net income lower.
Operating earnings, which exclude special one-time items, increased 10 percent to $102 million, or 48 cents per share. Pro forma operating earnings during the first quarter of 2008 totaled $93 million, or 44 cents per share.
Nasdaq OMX Group's operating profit excludes $8 million in merger-related expenses, $4 million in gains from the early retirement of debt, $3 million in expenses tied to job cuts and a $2 million loss related to the sale of its Iceland broker services business.
Analysts polled by Thomson Reuters, on average, forecast earnings of 47 cents per share for the quarter on net revenue of $378.9 million. Analysts estimates typically exclude special one-time items.
Nasdaq OMX Group's net revenue fell short of expectations despite a 33 percent increase to $369 million. Net revenue is total revenue less rebates, brokerage, clearance and exchange fees.
On a pro forma basis, which takes into account costs at firms Nasdaq OMX recently acquire as if they were a part of the company during the year-ago period, net revenue declined 12 percent.
Net market services revenues, which accounts for the bulk of Nasdaq OMX Group's revenue, increased 39 percent to $258 million during the quarter. The increase in market service revenue was due in part to acquisitions the company made in 2008, such as the Philadelphia Stock Exchange.
Market services revenues fell 13 percent on a pro forma basis.
Like many other firms, including competitor NYSE Euronext, Nasdaq OMX continued work on minimizing expenses during the quarter amid the ongoing economic turmoil. Expenses totaled $203 million, compared with $145 million during the first quarter last year. Expenses from the year-ago period do not include costs tied to operating acquisitions less than one year old.
Expenses on a pro forma basis fell 19 percent.
Declining pro forma expenses were tied to lower compensation, depreciation and computer operations and data transmission costs. Nasdaq OMX has also be reducing costs through the integration of acquisitions.
David Warren, Nasdaq OMX's chief financial officer, said in a statement the exchange operator now expects operating expenses to be between $830 million and $850 million in 2009, including $30 million in merger-related costs.
(This version CORRECTS description of figures in 11th-12th grafs as expenses rather than operating expenses)
