The Nasdaq Stock Market, Inc. today reported increased profits for both the fourth quarter and full year 2007.
Fourth quarter net income reached US$79.0 million, up from US$63.0 million in the quarter last year. Net income for the full year 2007 increased to US$518.4 million from US$127.2 million for 2006, but this includes pre-tax gains of US$431.4 million associated with Nasdaq’s sale of its share capital of the London Stock Exchange Group plc.
Fourth quarter 2007 results also include pre-tax gains of US$18.2 million related to foreign currency option contracts, as well as pre-tax charges of US$1.1 million related to the early extinguishment of debt and US$0.6 million in workforce reduction expenses. When excluding these items net income on a non-GAAP basis was US$69.1 million. This represents an increase when compared to non-GAAP net income of US$32.5 million for the fourth quarter of 2006, and US$62.1 million for the third quarter of 2007.
Revenues less liquidity rebates, brokerage, clearance and exchange fees (“net exchange revenues”) were US$211.6 million in the fourth quarter, an increase of 15.6% from US$183.1 million in the year-ago period, and up US$1.6 million from US$210.0 million reported in the third quarter of 2007.
“Our fourth quarter results cap off a truly defining year for Nasdaq,” commented Bob Greifeld, Nasdaq’s president and CEO. “During 2007 we were able to dramatically improve our financial and operational performance, leaving us stronger and better positioned for future success. We solidified our global footprint with the agreement to combine with OMX and invest strategically into the emerging markets of the Middle East. Additionally, we took steps to diversify our business into derivatives, clearing and other new products through the planned acquisitions of both the Philadelphia and Boston Stock Exchanges and through OMX’s announced acquisition of NordPool. As we enter 2008, we are even more excited about the opportunities in front of us as we execute our plans for geographic expansion and product diversification.”
“Nasdaq’s financial performance continued to be strong during the quarter,” commented chief financial officer, David Warren. “Net exchange revenues, which have grown for thirteen consecutive quarters, were up 15.6% over last year’s fourth quarter, while operating income increased nearly 50%.”
Nasdaq also said it has decided to forgo providing guidance for 2008 given the transactions that are expected to close during the first half, and the contributions that each will have on the financial results of the consolidated organization.