Nasdaq OMX said net profits at the global exchange operator slipped in the third quarter, blaming less volatile trading for a decline in sales at its core US equity trading business.
Unlike its previous quarter, the parent company of the Nasdaq Stock Market said it was not able to overcome the gloom in the wider industry, which had faced pressure to adapt to an environment where US equity volumes were set to decline for a fourth consecutive year.
US equity revenues dropped to $47 million, down $20 million from the same three-month period last year. The company said the fall was due to a highly active third quarter a year ago when the European debt crisis and US debt ceiling negotiations gripped markets.
Net income fell 23.6 per cent to $89 million in the three months to September 30, with earnings of 52 cents a share down from 61 cents the same time a year ago. Net revenues declined to $409m, compared with $436 million the year before.
Robert Greifeld, chief executive, said the company’s result were aided by efforts to diversify business away from a reliance on equity volumes, which fell more than 30 per cent year on year.
Christopher Harris, analyst at Wells Fargo, said the results benefited from a reduced guidance for full-year expenses, which Nasdaq said would be about 1.5 per cent lower.
The company made no mention of its $62 million voluntary accommodation plan for brokers, who say they suffered some $500 million from the botched flotation of the Facebook public offering on the US exchange in May.
That offer has received mixed reactions, with some still insisting they will seek to recover their entire losses. Last month, Nasdaq OMX fired back at banks such as Citigroup and UBS, who have criticised the offer, saying it “goes well beyond what is required”.
Nasdaq’s third quarter was also marked by another embarrassing episode when it and other exchanges were forced to cancel trades in Kraft Foods after an error sent its shares up almost 30 per cent in the opening minutes of trading. The glitch occurred while the exchange was hosting officials from the company to celebrate the split group’s recent switch to Nasdaq.
Financial Times