NYX Nyse Euronext

In a period of slower trading across the financial markets, Nasdaq OMX Group Inc.'s (NDAQ) profit fell 40% from a year ago but still managed to beat Wall Street's fourth-quarter earnings projections.

The fourth quarter's slower trading was a contrast to the hectic activity of the third quarter, when investors sought cover from market volatility, Europe's sovereign-debt crisis and worries of an economic slowdown.

Nasdaq reported a profit of $82 million, or 45 cents a share, down from $137 million, or 69 cents a share, a year earlier. Excluding items such as debt refinancing, per-share earnings rose to 63 cents from 55 cents, exceeding the 61 cents expected by analysts polled by Thomson Reuters.

Despite what executives described as a "challenging" environment for trading volumes, revenue from cash-equity trading was $385 million, up from $331 million a year earlier. Both figures were well below the $481 million that was seen in the brisk three months through the end of September.

Nasdaq Chief Executive Bob Greifeld said on a conference call with analysts that he saw signs that volumes were improving this year, but that uncertainty in market volumes was set to continue. "We have faced similar challenges in the past, and have found ways to grow," he said.

Addressing the European Union's decision to block the merger of NYSE Euronext (NYX) and Deutsche Boerse (DB1.XE), Greifeld said he thought that the move wouldn't preclude other large exchange mergers from taking place. He said he "empathized" with executives of both companies after word Wednesday morning that the merger had been halted.

"There is a compelling industrial logic of combining operations and technology of non-overlapping exchanges," he said, but added that regulators sent a clear message that transactions resulting in more than 90% market share were "highly suspect."

The latter comment was a reference to the dominating position the two companies would have had in Europe's on-exchange derivatives market, which had been estimated at 93%.

During the fourth quarter, the traditionally tech-heavy exchange operator aggressively wooed and won listings from its main rivals at NYSE Euronext. Nasdaq touted the defection of companies worth more than $80 billion in market capitalization during the quarter, highlighted by the switch of Texas Instruments Inc. (TXN) and Viacom Inc. (VIA) from the Big Board operator.

Revenue less liquidity, rebates, brokerage, clearance and exchange fees rose 5.5% to $422 million. Analysts were looking for $417 million.

Nasdaq's matched market share, or the amount of U.S. stock trading that went through its exchanges, came in at 21.3% in the fourth quarter, up from 19.6% a year earlier and but below the 22.4% recorded in the third quarter.

On the earnings call, Nasdaq executives also said that a stock dividend was a matter of "not if but when," predicting that a dividend would become "more real" near the end of the company's stock-buyback program.

Net exchange revenue at the company's market-services business rose 6.1% from a year earlier to $281 million.

Nasdaq shares were up 11 cents at $24.87 in recent trading. Through Tuesday's close, the stock is up 1% since the start of the year.

--By Brendan Conway, Dow Jones Newswires; 212-416-2670; brendan.conway@dowjones.com

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