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NYSE Euronext Beats Estimates, Reports Weakening Sales

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NYSE Euronext reported net income on Tuesday of $128 million, or $0.49 a share, for the third quarter of 2010, compared with net income of $125 million, or $0.48 a share for the third quarter of 2009.

Excluding the impact of special one-time items, net income in the third quarter of 2010 was $121 million, or $0.46 a share, compared to $138 million, or $0.53 a share, a year ago.

Equity analyst had estimated the company would have earnings of $0.43.

“In the third quarter, we continued to execute against our multi-year strategy despite challenging market conditions,” said NYSE Euronext CEO Duncan L. Niederauer, in a press release.

Revenues Update

Total sales including activity-assessment fees totaled $1.05 billion vs. $1.16 billion in the same quarter last year, a decline of 9%.

Revenues from transactions and clearing were $726 million, down 14.5% from last year’s $849 million. In the first three quarters of 2010, these sales totaled $2.4 billion vs. $2.6 billion in the same period of 2009.

Total revenues less transaction-based expenses, or net revenue, including Section 31 fees, liquidity payments and routing and clearing fees, were $599 million in the third quarter of 2010, down $22 million, or 4% vs. the year-ago results.

The decrease in net revenue was primarily driven by a $35 million, or 11%, drop in net transaction and clearing revenue, related to European cash and derivatives trading, partially offset by a $23 million, or 39%, increase in technology services revenue.

Market Developments

NYSE Euronext highlighted the following items in its third-quarter earnings release:

  • A total of 13 companies for a combined market capitalization of over $40 billion have transferred to NYSE markets from other exchanges year-to-date.
  • A total of 78 IPOs listed on NYSE Euronext markets for total proceeds of $17.4 billion year to date, compared to a total of 32 IPOs for $8.3 billion during the same period last year. As a result, NYSE Euronext has raised nearly times the amount raised by any other U.S. exchange during the period, according to Dealogic.
  • Total IPO proceeds raised year-to-date September 2010 included nine Chinese companies totaling $0.9 billion.
  • Venture capital and technology-related IPOs year-to-date include Sensata Technologies, MaxLinear, Calix, Higher One Holdings, Fabrinet, RealD, Green Dot and Envestnet.
  • NYSE Euronext is the leader year to date for global secondaries (proceeds) with a total of 370 for total proceeds of $147 billion, including the largest secondary, Petrobras which raised $70 billion.
  • NYSE Liffe U.S., the U.S. futures exchange of NYSE Euronext, says it will coordinate with its global customer base to complete the orderly transition of trading and open interest of all existing MSCI-linked stock index futures in the U.S. to its platform no later than June 17, 2011.
  • This follows MSCI’s announcement that other contracts listed in the U.S. under its existing licenses are expected to cease trading with the June 2011 expiry.