The Nasdaq Stock Market Inc. reported third quarter 2006 net income of US$30.2 million, an increase of 69.7% from the third quarter of 2005, and 81.9% from the second quarter of 2006.

Gross margin, representing total revenues less cost of revenues, was US$171.2 million in the third quarter of 2006, an increase of 31.1% from US$130.6 million in the year-ago period, and up marginally from US$171.1 million reported in the second quarter of 2006.

“Third quarter operating income grew an impressive 116.9% through the continued execution of our strategic plan. We’ve been able to improve profitability through successful acquisitions and gains in market share, while maintaining our expense control discipline,” Nasdaq’s CEO, Robert Greifeld commented. “Significant gains in our share of trading in NYSE-listed stocks have been achieved, with our matched market sharing growing to 12.1% in the quarter, up from 4.7% in the year-ago quarter. We are on track to reach our 2006 objectives through continued innovation and consistent execution.”

Included in total expenses for the third quarter 2006 are pre-tax charges of US$4.8 million relating to Nasdaq’s continuing efforts to reduce operating expenses and improve the efficiency of its operations, as well as to integrate INET. These charges include: expenses associated with its technology review, workforce reductions and real estate consolidation plans.

Nasdaq is raising guidance for the full-year 2006. Net income is expected to be in the range of US$89 million to US$92.0 million for the year, including the impact of charges associated with the cost reduction program, INET integration, and losses on extinguishment of debt.

“Nasdaq’s third quarter results highlight our ability to quickly and efficiently integrate acquisitions, allowing them to contribute to improved margins. When coupled with revenue growth derived from our product innovations and our ability to reduce legacy operating expenses, we have created an effective business model designed to drive growth in profitability,” said Nasdaq’s CFO, David Warren. “We are now in the final steps of our INET integration and, once completed, fully expect to realize all deal synergies. Our continued ability to execute to plan allows us to improve our outlook for the remainder of 2006.”