NYX Nyse Euronext

NYSE Euronext (NYX) on Tuesday reported a $184 million profit for the second quarter, buoyed by its derivatives business and asset sales.

The transatlantic exchange operator reversed a year-ago loss amid a surge in trading on its platforms in Europe and the U.S., with its futures and options business accounting for almost half of operating income.

"We're growing our derivatives business, stabilizing our cash equities business, and providing innovative technology solutions," said Chief Executive Duncan Niederauer on a post-earnings' call.

Niederauer said the passage of the U.S. financial reform was likely to bolster business, particularly U.S. derivatives trading services, though its U.S. futures and clearing units remain loss-making, in contrast to their European counterparts.

He also urged European regulators to examine the effects of stock market fragmentation that contributed to the May 6 flash crash. The European Union is revisiting reform of share-trading rules.

The market volatility during April and May lifted trading volume across the exchange sector, though activity has tailed away in July and August.

NYSE Euronext has diversified from its traditional focus on cash equities by expanding its derivatives business and bolstering a technology unit selling services to traders and other exchanges.

The second quarter profit compared with a year-ago loss of $182 million weighed by merger and restructuring costs. Earnings per share of 70 cents beat market expectations and compared with a 70-cent loss a year earlier

NYSE Euronext were up 1.9% at $30.50 in pre-market trade, lifted by the upside surprise and full-year cost guidance trimmed by positive currency effects.

Revenue and operating profit from its cash equities and listings unit fell from a year earlier, though was up from the first quarter of 2010.

The company is developing new data centers in New Jersey and the London area, underpinning a raft of products and services NYSE Euronext seeks to sell to trading firms and other market participants. Niederauer said Tuesday that 80% of revenues in its technology business is "recurring."

For the quarter NYSE Euronext recorded a net pre-tax gain of $54 million from asset disposals, primarily tied to the sale of a 5% stake in India's National Stock Exchange for $175 million, after NYSE Euronext saw limited opportunities for joint business growth.

Total revenue for the quarter was flat at $1.25 billion, while net revenue--excluding transaction-based expenses--rose 7% to $654 million.

NYSE Euronext said its board will pay a third quarter dividend of $0.30 per share.

-By David Pearson, Dow Jones Newswires; +331 4017 1740, david.pearson@dowjones.com

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