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Earnings Analysis: 
NYSE Euronext Profit Rockets 246% after Takeover
Author: 123jump.com Staff
123jump.com
Last Update: 1:57 PM EST February 05 2008


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The stock market operator NYSE Euronext net profit tripled after the NYSE’s takeover on the pan-European market Euronext. Net profit for the fiscal year was 643 million euros ($952.5 million), an increase of 214% from a year ago. The profit growth was attributed to the tightened expenses controls and record trading in both the derivative and cash markets.

 
Listings on NYSE Euronext’s Alternext grew to 119 companies by year-end, raising more than $2.4 billion.

At year-end, NYSE Euronext had $1,532 million of cash, cash equivalents, investment and other securities and $2,713 million in debt.

Earnings Guidance

NYSE Euronext chief executive Duncan L. Niederauer said acquisitions will be the cornerstone for the company’s growth going forward citing recent purchase o American Stock Exchange and Wombat Financial Services.

He said: “We will grow organically and through acquisitions that fit strategically and create value for our shareholders…Additionally, our strategic decision to in-source our European trading and information technology operations through the AEMS transaction, which was announced in December, will give us control over all of our core technology platforms and greatly enhance our global exchange technology business.”

As a result of the AEMS transaction, the group is expecting to earn more than $200 million in annual run-rate technology cost savings by the first quarter of 2010.

By year end that year, “we expect to realise the full $250 million of merger-related annual run-rate technology savings.”

NYSE Euronext has also targeted first quarter 2008 growth of more than $25 million annual rate non-technology related savings.

Analysts surveyed by Thomson Financial have guided earnings in the current quarter at 78 cents per share on revenues of $813.36 million.

Share Price Review

NYSE Euronext shares fell $11.70, or 14.1% to $71.03 after hours Tuesday, and fell further down to $68.81 in pre-market trading Thursday.

Over the past 52 weeks, the stock has traded in the range $64.26 to $101. Analysts are now targeting a one-year price of $88.82.
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