NASDAQ Has Better 1st Quarter Profit than Estimates

The 2nd largest stock exchange in US, NASDAQ OMX Group Inc. reported first quarter profit which exceeded estimates set by analysts, mainly because of the increase in the revenues for the technology and information services companies. The earnings results excluded certain items and it increased to 64 cents per share in the 3 months ending on 31st March. Incidentally, in last quarter each share was priced at 61 cents. The figures were released through an official statement. According to many analysts, earnings would have been 62 cents per share; however, the actual results were better than that. The company expects to pay $10 million for resolving a Securities and Exchange Commission investigation into the mishandling of the initial public offering of Facebook.

Robert Greifeld, who is the Chief Executive Officer, is currently diversifying the business for offsetting a global decline in the stock trading. Incidentally, in the last few months, the exchange has bought eSpeed which is an electronic platform for trading the US Treasury bonds. Apart from that, a 25% stake was acquired in TOM as well. TOM, incidentally, is a Dutch alternative trading system which focuses mainly on options. NASDAQ has also acquired the shareholder-relations unit of the Thomson Reuters Corp.

In a statement, Greifeld stated that the volume environment stays challenging, still, the portfolio of trading, corporate, information and technology businesses of NASDAQ is delivering consistent revenue and earnings performance. Greifeld added that the economy of US is on a recovery mode now and the investor confidence is increasing as well. These factors will ultimately lead to stronger tailwinds for the business of NASDAQ.

Though better than economic predictions, the charges related to the Facebook IPO paved the way for a 51% decline in the 1st quarter income of NASDAQ, if compared to the net income of the last year for same time frame.

On today, the NASDAQ shares were priced at $27.67 per share and the same declined by 2.8%. The gauge is actually heading for the lowest close of the same since 24th January.

On a call with the analysts, Greifeld stated that he expects of a beta return to the equity volumes. He added that NASDAQ will take benefit of that. Still, it is important for the company to build the business in such a way that it does not depend on the volume environment.