NEW YORK – NYSE Euronext, the trans-Atlantic stock exchange operator, said Friday its third-quarter profit fell by 33 percent due to merger costs, severance payments and a decline in European derivatives trading.
Net income for the quarter ended Sept. 30 fell to $174 million, or 66 cents per share, from $258 million, or 97 cents per share, during the same quarter a year earlier. Revenue rose to $1.2 billion in the quarter from $1.1 billion a year earlier.
Excluding the discontinued operations of French software provider GL Trade, merger expenses, exit costs and other items, earnings for the quarter were $192 million, or 72 cents per share, compared with $201 million, or 75 cents per share, during the year-ago period. NYSE Euronext said earlier this month it sold its 40 percent stake in GL Trade.
Analysts polled by Thomson Reuters, on average, forecast earnings of 72 cents per share for the quarter. Analysts do not always include gains and charges in their estimates.
Profit fell at NYSE Euronext, in part, as European derivatives trading declined. Futures and options contracts traded on Liffe, NYSE Euronext's European derivatives trading platform, fell 10 percent during the quarter to 3.8 million contracts. Derivatives trading revenue fell nearly 6 percent to $229 million in the third quarter from $243 million a year earlier.
NYSE Euronext also took $30 million in charges during the quarter related to recent mergers and severance expenses. In August, NYSE Euronext completed the acquisition of a 50 percent stake in technology firm Atos Euronext Market Solutions, which was previously owned by Atos Origin.
On Oct. 1, NYSE Euronext completed its acquisition of the American Stock Exchange.
Though the integration of new operations added to expenses during the third quarter, they should eventually lead to cost savings. The American Stock Exchange acquisition is expected to provide annualized savings of more than $100 million by the end of 2009.
Chief Executive Duncan Niederauer said he is continuing to cut costs and invest in future opportunities "despite turbulent markets and the global financial crisis."
"The past year's technology upgrade of our trading systems served customers well as NYSE Euronext markets operated with great reliability and provided continuous access to liquidity during an especially volatile period," he said.
NYSE Euronext has seen volatile markets in recent months amid the ongoing credit crisis. That volatility, though, led to an increase in trading in cash equity markets in the U.S. and Europe. Average daily volume in U.S. cash markets during the third quarter rose 17 percent to 3.6 billion shares. A total of 231.8 billion shares were traded during the quarter, making it the most active quarter on record.
European cash markets saw a 16 percent increase in average daily volume as 1.6 million trades were completed per day.