Articles for Nasdaq

NASDAQ OMX Q4 Earnings: High Trading Activity Offsets Weakness In Non-Transaction Businesses

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Friday, January 30th, 2015 by

NASDAQ OMX Group (NASDAQ:NDAQ) announced its Q4 earnings on Thursday, January 29, reporting 8% year-on-year growth in consolidated revenues to $919 million during the quarter. NASDAQ’s information services segment and listing revenues both witnessed a 5% y-o-y rise in revenues to $113 million and $61 million, respectively. On the other hand, revenues generated by technology solutions fell by 8% over the prior year quarter to $138 million. Market services, or transaction-based revenues, rose by 14% y-o-y to $607 million during the quarter driving much of the top-line growth. However, net trading revenues – excluding cost of revenues – were flat over the prior year period at $205 million due to higher transaction rebates and brokerage and clearance fees expenses incurred by NASDAQ.

The exchange operator had a strong start to 2014 in terms of trading activity across its platforms, with equity and derivatives trades in the U.S. boosting transaction-based revenues. However, as trading volumes declined in the second quarter, the company’s trading businesses suffered in both Europe and the U.S. NASDAQ’s non-transaction businesses, including market data, technology solutions and corporate services, drove revenues and profits in Q2. On the other hand, an improvement in trading volumes across equities and options in the U.S. helped drive trading revenues in the third quarter, even as volumes in Europe remained low. Trading business picked up further in Q4 across both Europe and the U.S. For the full year, NASDAQ’s consolidated revenues were up by 9% to $3.5 billion, with technology solutions revenues rising by over 19% y-o-y to $542 million. The information services segment witnessed an 8% growth for the full year to $473 million, while listing services only grew by about 4% to $238 million. Transaction-based revenues were up by over 7% to $2.2 billion for the full year. However, net trading revenues – excluding cost of revenues – were only about 4% higher than the previous year at $814 million. Read More »

NASDAQ OMX Earnings Preview: Trade Volumes Could Boost Q4 Revenues

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Tuesday, January 27th, 2015 by

NASDAQ OMX Group (NASDAQ:NDAQ) is scheduled to announce its Q4 earnings on Thursday, January 29. The global exchange operator witnessed low trading volumes in Q2 and Q3 after a solid start to 2014 in the first quarter. As a result, revenues generated by NASDAQ’s market services division were up by almost 15% y-o-y in Q1 at $582 million. However, combined trading revenues through the second and third quarters were flat over the comparable prior year period at just over $1 billion. Revenues generated by the company’s listing business through the first three quarters of 2014 rose by a mild 4% over the year-ago period to $177 billion.

On the other hand, the company’s non-trading businesses, including market data, corporate services, market technology and listings, witnessed sustained growth through the three quarters of 2014, offsetting sluggish growth in transaction-based business. NASDAQ’s technology division saw a 32% y-o-y growth in revenues to $403 million through the three quarters of 2014, while information services revenues were also up by almost 10% y-o-y to $360 million in the same period. Read More »

NASDAQ OMX Adds To Indexing Business With $225 Million Acquisition

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Tuesday, January 6th, 2015 by

NASDAQ OMX Group (NASDAQ:NDAQ), one of the most well-diversified global stock market operators, recently announced the acquisition of American index and analytics provider Dorsey Wright & Associates for $225 million with an intent to expand its exchange-traded fund (ETF) trading and indexing business. According to NASDAQ management, the acquisition will contribute to the upcoming earnings in late January, and should not impact capital return plans. Read More »

High Trading Volumes Could Lead To A Profitable Year-End For CME

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Thursday, December 18th, 2014 by

Leading global derivatives exchange operator CME Group (NASDAQ:CME) recently reported its monthly trading metrics for the month of November. After witnessing record trading activity in the month of October (17.6 million contracts traded a day), trade volumes slumped to just under 13 million contracts per day through November. However, trade volumes were about 4% higher than the year ago period. Interest rate and equities derivatives saw the largest sequential drop among the various asset classes traded on CME’s platform, while energy derivatives trading volumes continued to rise. On a year-over-year comparison, all asset classes witnessed a rise in trading activity with the exception of interest rate and equities contracts.

CME Group witnessed 7% annual growth in clearing and transaction fee revenues in the most recent quarter, with trading activity rising for interest rate and foreign exchange (FX) derivatives during the quarter ending September. Growth in trading activity has continued through Q4, despite a sequential drop in trading volumes in November. Below we take a look at CME’s November performance across key asset classes. Read More »

Will NASDAQ End The Year On A High Note?

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Friday, December 12th, 2014 by

NASDAQ OMX Group (NASDAQ:NDAQ) is one of the most well-diversified global stock market operators, with trading products ranging from equities, derivatives, exchange traded funds and fixed income products. The exchange operator announced its monthly volume report for November, with a decline in trading volumes after a surge in activity observed in October. Here’s a quick roundup of trading metrics across various products for the month of November.

We have a $45 price estimate for NASDAQ OMX’s stock, which is slightly below the current market price. NASDAQ OMX’s stock price has risen by over 10% since the company released its Q3 earnings in late October. Read More »

NASDAQ Wins Bid To Regain Control Of Tape C Market Data Feed

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Friday, November 14th, 2014 by

Exchange operator NASDAQ OMX Group (NASDAQ:NDAQ) won the bid to manage infrastructure for one of the three Securities Information Processors (SIP), which are responsible for collecting and disseminating securities quotes across America’s eleven stock exchanges. NASDAQ intends to upgrade its SIP – or Tape C – by reducing latency for the live market data feed. Moreover, NASDAQ will form a limited liability company named Consolidated Tape C LLC, which will be registered with the SEC, to monitor and manage all unlisted trading privileges (UTP) for its listed securities. This is a positive for the stock market operator after some technical issues that marred NASDAQ’s image and impacted investor confidence in the last couple of years. Read More »

IntercontinentalExchange Earnings: Non-Transaction Businesses Drive Earnings As Trading Volumes Recover

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Wednesday, November 5th, 2014 by

IntercontinentalExchange Group (NYSE:ICE) announced its Q3 earnings on November 4, reporting a 120% year-on-year increase in net revenues to $745 million. The surge in the company’s top line is attributable to the NYSE acquisition in November of last year. After acquiring all of NYSE-Euronext’s businesses, ICE sold off its European equity trading business Euronext NV, which contributed about $60 million to ICE’s net revenues in the first quarter, in June. ICE’s current transaction-based businesses include derivatives trading in Europe and the U.S. and equity trading in the U.S. The company acquired the Singapore Mercantile Exchange (SMX) and clearing house earlier in the year, making it the only operator in the world with exchanges across the U.S., Europe, Latin America (Brazil) and Asia (Singapore). ICE has rebranded SMX as ICE Futures Singapore, with the exchange operator announcing a launch date for the Asian marketplace of March 2015.

The company witnessed a 5% rise in European derivatives trading volumes to a total of 84 million contracts traded during the quarter. On the other hand, consolidated futures and options trading volumes in the U.S. in Q3 were lower than the year-ago period by over 10% at 81 million contracts. Consolidated revenues generated by the trading of various asset classes – including oil, natural gas, power, energy, agricultural commodities and interest rates – rose by about 5% to $232 million for the quarter. Furthermore, the exchange operator witnessed inorganic growth in the U.S. equity trading business and the market data segment, owing to the addition of the corresponding NYSE divisions. Revenues generated by cash equity and equity options trading stood at $338 million in Q3, while consolidated market data revenues were up by over 150% over the year-ago period to $105 million. ICE generated $86 million from its listing business, up by 11% compared to Q3 2013 on a pro forma basis. Read More »

IntercontinentalExchange Earnings Preview: Trade Volumes To Drive Revenues, Margins

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Monday, November 3rd, 2014 by

IntercontinentalExchange Group (NYSE:ICE) is scheduled to announce its Q3 earnings on November 4. The exchange operator reported growth of over 100% year-on-year in net revenues to $750 million in the second quarter, with much of the growth coming from the NYSE acquisition in November of last year. ICE faced a year-on-year decline in trading volumes in its core derivatives trading business in the second quarter of the year, which the company attributed to low volatility levels in global markets. However, low trading volumes were offset by a corresponding increase in the rate per contract (RPC) earned by the company.

ICE sold off its European equity trading business Euronext NV in June. The business contributed about $60 million to ICE’s net revenues in the first quarter. The move to spin off Euronext should help ICE improve its margins in the coming years, since equity trading is typically a low-margin business. At the beginning of 2013, the combined operating margins of NYSE Euronext and ICE were estimated to be around 42%. During the year, the company realized $95 million in synergies, bringing the margins up to around 45%. Comparatively, Euronext’s operating margins stood at around 41% last year, and the company initially expected its full year margins to be around 49% through 2014. However, the company reported operating margins of 50% for both the March and June quarters, with $108 million in expense synergies in the first half of the year. The company attributed the improvement in margins to “disciplined expense management” and believes that it can achieve expense synergies of almost $240 million for the full year. Going forward, the company expects margins to stay at 50-51% for the full year.

We have a $225 price estimate for IntercontinentalExchange Group, translating into a $25.9 billion market cap. Our price estimate is about 9% higher than the current market price. Read More »

CME Earnings: Interest Rates, FX Derivatives Drive Q3 Results

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Monday, November 3rd, 2014 by

CME Group (NASDAQ:CME) announced its Q3 earnings on Thursday, October 30, reporting a nearly 7% year-over-year rise in net revenues to $762 million. Clearing and transaction fee revenues grew by over 7% y-o-y to $642 million, while market data revenues registered 12% growth over the prior year quarter to $88 million. According to our estimates, CME’s adjusted EBITDA margin in Q3 was almost a percentage point higher than the prior year quarter at 65.4%. Since most expenses incurred by exchanges are fixed in nature, revenue growth for CME had a direct impact on the company’s margin improvement.

We have an $80 price estimate for CME’s stock, which is roughly in line with the current market price. Read More »

Trading Revenues Offset Slump In NASDAQ’s Non-Transaction Businesses

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Monday, October 27th, 2014 by

NASDAQ OMX Group (NASDAQ:NDAQ) announced its Q3 earnings on Friday, October 24, reporting nearly stagnant consolidated revenues of $818 million during the quarter. NASDAQ’s information services segment witnessed a mild 3% year-on-year decline in revenues to $114 million while revenues generated by technology solutions fell by 2% y-o-y to $130 million. Market services, or transaction-based revenues, rose by 3% to $515 million during the quarter to partially offset the decline in non-trading businesses. However, net trading revenues – excluding cost of revenues – declined by 3% y-o-y to $194 million due to higher transaction rebates and brokerage and clearance fees expenses incurred by NASDAQ.

The exchange operator had a strong start to 2014 in terms of trading activity across its platforms, with equity and derivatives trades in the U.S. boosting transaction-based revenues. However, as trading volumes declined in the second quarter, the company’s trading businesses suffered in both Europe and the U.S. NASDAQ’s non-transaction businesses, including market data, technology solutions and corporate services, drove revenues and profits in Q2. On the other hand, an improvement in trading volumes across equities and options in the U.S. helped drive trading revenues in the third quarter, even as volumes in Europe remained low. Additionally, the company’s non-trading businesses, including market data, corporate services, market technology and listings, sustained mild declines during the quarter. Read More »