Technology services boost NYSE Euronext profit

By Luke Jeffs

February 10, 2012 4:56 AM EST

NYSE Euronext posted quarterly operating profit at the top end of expectations with a 13 percent rise helped by strong information and technology services, an area the U.S. group is now looking to as a growth driver.

The New York exchange, whose $7.4 billion takeover by German peer Deutsche Boerse was scuppered last week, said on Friday fourth-quarter operating income rose to $212 million.

"We have only become stronger as a company during this time, as evidenced by the double-digit growth in earnings we recorded in 2011 and our strengthened balance sheet," chief executive Duncan Niederauer said.

Fourth-quarter revenue rose 2 percent to $628 million, in line with a forecast for $626.6 million, while net income, adjusted for merger costs, was $128 million, versus a $126.3 million forecast.

The results came a week after European Union anti-trust authorities forced Deutsche Boerse to abandon its planned takeover of NYSE.

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Information and technology services, which Niederauer said last week the company would look to for opportunities to grow, saw a bigger boost than NYSE's more traditional businesses, with revenue up 11 percent.

NYSE responded to the collapse of the Deutsche Boerse deal by saying it will return $550 million to shareholders through a share repurchase program and seek to grow its derivatives business.

The group will provide details of a two-year plan to drive higher earnings per share at an investor day in April, chief financial officer Michael Geltzeiler said.

NYSE rival Nasdaq OMX Group beat fourth-quarter expectations last week, boosted by a rise in revenue from market data and technology, which helped offset a soft trading environment.

Also on Friday, LCH.Clearnet, NYSE's clearing house in Europe, reported a rise in underlying net revenues of 16 percent to 387 million euros ($515 million), while underlying full-year operating profit jumped 81 percent to 107 million.

NYSE Euronext is seen by analysts as an obvious rival bidder for LCH.Clearnet, which has been in exclusive sales talks with the London Stock Exchange since September.

NYSE was in talks about a possible joint bid for LCH with data vendor Markit but the plan was scrapped in the middle part of last year.

($1 = 0.7517 euro)

(Additional reporting by Kylie MacLellan; Editing by David Cowell and Dan Lalor)

Copyright 2012 Thomson Reuters. All rights reserved.
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