The Nasdaq Stock Market Inc. reported net income of US$14.0 million for the second quarter 2005, up from US$4.8 million for the second quarter 2004, and an increase of 10.2% from the first quarter of 2005.

Gross margin, which represents total revenues less cost of revenues, was US$130.4 million for the second quarter 2005, an increase of 8.7% from US$120.0 million in the year ago period, and an increase of 3.2% from US$126.3 million in the first quarter 2005.

Included in second quarter 2005 total expenses are US$5.9 million of pre-tax charges associated with Nasdaq’s continuing efforts to improve efficiencies and reduce operating expenses. Additionally, second quarter 2005 results included a pre-tax charge of US$7.4 million related to financing the acquisition of Instinet.

“Nasdaq’s consecutive string of strong quarters demonstrates the continued execution of our plan to improve profitability. For the third straight quarter we’ve been able to grow the top line and improve net income. And we’ve made these improvements while successfully integrating Brut into our operations, which has laid the groundwork for the acquisition of [Instinet],” said Nasdaq chief executive officer, Robert Greifeld. “Looking into the second half of the year, Nasdaq remains squarely focused on continuing to strengthen the competitiveness of our business model.”

The exchange has revised its expectation for the year upward. It now predicts net income in the range of US$47.0 million to US$51.0 million for the year.

Nasdaq’s chief financial officer, David Warren, explained, “During the quarter we achieved further reductions in ongoing operating expenses, strengthening our operating model, increasing our competitiveness and delivering solid earnings growth. As a result of our positive first half performance we are revising our full-year guidance for
2005.”