Nasdaq OMX Group Inc. NDAQ reported record third-quarter 2015 operating earnings per share of 88 cents, which surpassed the Zacks Consensus Estimate of 86 cents by 2.3%. The bottom line was also significantly above the prior-year quarter figure of 78 cents.
GAAP net income was a record of 80 cents per share, up 12.7% year over year.
Total net exchange revenues increased 6.4% year over year to $529 million. The top line also beat the Zacks Consensus Estimate of $524 million. Excluding currency fluctuations, organic net revenues improved 9% in the reported quarter.
The impressive results were driven by strong operational activities, strong listings and IPOs and disciplined expense control. Also, these positives partially offset foreign exchange headwinds.
Detailed Analysis
Segment-wise, net exchange revenues at Market Services increased 5.8% from the year-ago quarter to $200 million. Listing Services revenues grew 11.9% to a record $66 million, while Information Services revenues soared 15.8% to a record $132 million, both on a year-over-year basis. However, Technology Solutions revenues declined nearly 3% to $131 million in the reported quarter.
Nasdaq’s order intakes surged to $83 million from $28 million in the year-ago period. Additionally, total order value (the value of orders signed but not recognized as revenues) soared 15.9% year over year to $738 million from $637 million in the prior-year quarter. New listings totaled 88, which included 35 IPOs.
On a non-GAAP basis, operating expenses were $276 million, up 3.4% from that in the year-ago period. Consequently, total operating income on a non-GAAP basis climbed 10% year over year to a record $253 million. Operating margin also improved 200 basis points to 48% from the year-ago quarter figure.
Financial Update
As of Sep 30, 2015, Nasdaq had cash and cash equivalents of $290 million, significantly down from $427 million at year-end 2014. Debt obligations of Nasdaq were $2.4 billion, up 5.1% from nearly $2.3 billion at the end of 2014.
Nasdaq’s total assets decreased to $11.8 billion from $12.1 billion at year-end 2014. Total equity also deteriorated to $5.65 billion from $5.89 billion at the end of 2014.
Capital Deployment Update
Nasdaq spent $255 million to buyback 4.9 million shares during the reported quarter. The company has returned $418 million of capital to its shareholders over the first nine months of this year through share repurchases and dividend payouts. The company has $226 million remaining under its authorization.
Zacks Rank and Other Stocks
Nasdaq presently carries a Zacks Rank #2 (Buy).
Among the other stocks from the finance sector, CBOE Holdings, Inc. CBOE is slated to report its third-quarter earnings on Oct 30, and American Capital, Ltd. ACAS is scheduled to report the same on Nov 4. Arch Capital Group Ltd. ACGL will report the third-quarter results on Oct 28. While American Capital Sports a Zacks Rank #1 (Strong Buy), both CBOE Holdings and Arch Capital hold the same Zacks Rank as Nasdaq.
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