The Nasdaq Stock Market Inc. today reported fourth quarter earnings more than tripled thanks to a gain on foreign-currency option contracts.

Net income for the quarter ended Dec. 31, 2006 climbed to US$63 million, an increase of US$45.9 million from US$17.1 million in the fourth quarter of 2005.

Net income for the full year 2006 was US$127.9 million versus net income of US$61.7 million for the full year 2005. Included in fourth quarter 2006 net income is a US$29.4 million gain, net of tax, on foreign currency option contracts purchased to hedge the foreign exchange exposure on the acquisition bid for the London Stock Exchange.

Operating income was US$68.1 million for the fourth quarter of 2006, an increase of US$34.9 million, or 105.1% when compared to US$33.2 million for the fourth quarter of 2005, and up slightly from US$67.9 million for the third quarter 2006. Operating income for the full year was US$214.1 million, an increase of 88.3% when compared to US$113.7 million for the
full year 2005.

Gross margin, representing total revenues less cost of revenues, was US$183.1 million in the fourth quarter of 2006, an increase of 32.1% from US$138.6 million in the year-ago period, and up 7.0% from US$171.2 million reported in the third quarter of 2006. Gross margin for the full year 2006 was US$687.4 million, an increase of 30.7% from US$526 million in 2005.

“Our strong financial results point to the success that we achieved in 2006,” commented Nasdaq’s chief executive officer, Robert Greifeld. “During the year we began operations as a national securities exchange, completed the migration of Nasdaq-listed stocks to a single trading platform, increased our share of U.S. equity trading and initial public offerings, and continued to increase the value proposition for listing on Nasdaq by offering more products and services.”

Greifeld concluded, “We enter 2007 with a stronger core business that will support our new growth initiatives to increase revenue and profitability. We plan to achieve this by gaining market share and through new initiatives such as our planned options exchange and Portal market.”