On Tuesday before the market’s open, NYSE Eurornext (NYSE:NYX) reported its fourth quarter and full-year earnings.
For the fourth quarter, net income dropped 75% to $28 million from the previous year’s $100 million. This came on a drop in futures and securities trading from both domestic and overseas venues.?
Earnings came in at 43 cents, exceeding analysts’ median estimates at 39 cents.?
In a conference call after the report had been released, NYSE Euronext Chief Executive Duncan Niederauer said?via Dow Jones,?”A lackluster trading environment continued to impact our results” but said more about the quarter in the release with:
“Our fourth quarter results reflect both the beneficial actions we took to refinance our debt and rationalize our clearing plans for Liffe in connection with the announced move to ICE Clear. Along with the continued progress we are making on reducing expenses as part of Project 14, we are focused on building momentum in our business prior to closing the deal with ICE, which we expect to close in the second half of this year. We believe that combining our highly complementary businesses will create a global exchange player with a particularly compelling and diverse global derivatives franchise, and an ?end-to-end? multi-asset business that would be very well positioned to compete and serve a global client base, while creating meaningful value for shareholders.?
NYSE Euronext’s derivatives markets revenue dropped 9% in the quarter to $221 million. Trading on the exchange’s Liffe futures platform declined 15% for the quarter as compared to the previous year.?
Securities trading and listings revenues dropped 17% to $568 million.
The recent numbers come as the company’s parent increased its cost-cutting efforts in the quarter, including a $115 million slashing in expenses for some of its businesses and projects. This is part of a two-year effort beginning in 2012, called “Project 14” to cut $250 million in costs by 2014.
In 2013, the proposed acquisition by IntercontinentalExchange to acquire NYSE for $8.2 billion is likely to take center stage. For the last four quarters, earnings have dropped at NYSE. This comes on 2012 U.S. stock trading declining 18 percent as well as the drop off in options volume last year. ??
After Tuesday’s report,?Ed Ditmire, a Macquarie Group Ltd.analyst, wrote in a research note via Bloomberg, ?NYSE shares are tied to ICE stock price, but better revenues and faster cost saves could bode well for combined company, giving both names an upward bias on these results.??
On Monday prior to the earnings report,?NYSE Euronext shares increased?0.2 percent to $34.87. Year-to-date, shares were up 11 percent.?