NYSE Euronext Announces Second Quarter 2007 Financial Results

Cash Equities and Derivatives Trading Fuel Growth
Submitted by Anastvatz on Thu, 2007-08-02 08:29.
Posted under:

NYSE Euronext Announces Second Quarter 2007 Financial Results

NYSE Euronext (NYSE Euronext: NYX) today (August 2) reported net income of $161 million, or $0.62 per diluted share, for the three months ended June 30, 2007, a 164% increase as compared to net income of $61 million, or $0.39 per diluted share, for the three months ended June 30, 2006. These results are presented in accordance with U.S. Generally Accepted Accounting Principles (GAAP).

Second quarter 2007 GAAP results include the operations of NYSE Group for the full quarter and the results of Euronext N.V. from April 4, 2007, the closing date of the combination between NYSE Group and Euronext N.V. The comparative results for 2006 reflect the operations of NYSE Group only.

Included in the results for the three months ended June 30, 2007 are $16 million in merger expenses and exit costs consisting primarily of professional and other fees incurred in connection with both the acquisition of Archipelago Holdings on March 7, 2006 and the combination with Euronext N.V. on April 4, 2007.

Giving effect to the combinations as if they had occurred at the beginning of the earliest period presented, but excluding merger expenses, exit costs and other non-recurring items, NYSE Euronext’s net income on a non-GAAP basis for the three months ended June 30, 2007 would have been $172 million, or $0.65 per diluted share, a $39 million or 29% increase as compared to net income of $133 million, or $0.50 per diluted share, for the three months ended June 30, 2006. In addition, on a non-GAAP basis, operating income grew 27% to $275 million for the second quarter of 2007 from $217 million in the year-ago period. A full reconciliation of these non-GAAP results is included in the attached tables.

At constant USD/€ exchange rates, excluding acquisitions and divestitures which occurred during the period from June 30, 2006 through June 30, 2007, and on a non-GAAP basis, combined NYSE Euronext revenues, net of activity assessment fees, for the three months ended June 30, 2007 increased 12% while fixed operating expenses (defined as operating expenses, net of Section 31 fees, merger expenses, exit costs, liquidity payments, routing and clearing fees) decreased 9% compared to the three months ended June 30, 2006.

"Record revenues in our European cash and derivatives trading, as well as balanced growth in other business lines, including listings and market data, produced a strong second quarter for NYSE Euronext," said Nelson Chai, Executive Vice President and Chief Financial Officer. "These results underscore NYSE Euronext’s growing product and geographic diversity, as well as increasing user demand for our products and services on a global scale. Our business integration efforts are progressing well, and we remain focused on strategically advancing our global leadership position for the benefit of our customers and shareholders. Moreover, giving effect to foreign currency translations and recent acquisitions, we continue to reduce our fixed expense base through aggressive cost management, which is driving further expansion of our operating margin." -NYSE Euronext