By Ulrike Dauer
FRANKFURT--German exchange operator Deutsche Boerse AG (DBOEF,
DB1.XE) late Monday shaved its full-year net revenue and profit
targets after net profit almost halved in the third quarter
compared with a year earlier, as sluggish trading and uncertainty
over the euro sovereign crisis continued to hamper revenue.
Deutsche Boerse, which has returned to full-fledged competition
with NYSE Euronext (NYX) since the trans-Atlantic merger was called
off earlier this year, said it expects net revenue of around 1.95
billion euros ($2.52 billion) compared with the previous target
range of EUR2.15 billion to EUR2.3 billion. After the first nine
months of the year, net revenue was EUR1.49 billion.
Now that the previous net revenue target is out of reach,
Deutsche Boerse also said full-year earnings before interest and
taxation, or EBIT, will remain below the previous target of EUR1.2
billion and EUR1.35 billion. It didn't, however, give a new target.
After the first nine months, EBIT was EUR784.2 million.
The exchange operator did confirm its full-year cost target of
below EUR930 million.
In July, Deutsche Boerse cautioned that net revenue will be shy
of the forecast range if markets don't improve in the second half.
If that happens, the 2012 earnings before interest and taxes will
also be weaker than the previous forecast, the company had said,
though it stopped short of issuing a full revenue and profit
warning.
Third-quarter net profit was EUR159.9 million, down from
EUR317.0 million in the same period a year ago and below a Dow
Jones consensus of EUR166 million.
Quarterly EBIT was also lower at EUR245.4 million, a 27% decline
from EUR333.8 million a year ago, and also below the forecast
EUR248 million.
Quarterly net revenue was EUR471.0 million, down 19% from
EUR578.6 million a year earlier, and shy of the forecast EUR479
million.
In the quarter, all European exchanges and banks alike continued
to feel the pain as the weak environment and uncertainty over the
outcome of the euro zone's sovereign-debt crisis continue to weigh
on capital markets and kept investors out.
For Deutsche Boerse, the weaker performance in its Xetra cash
market and Eurex derivatives exchange--amid muted investor
activity--wasn't offset by a robust contribution from the
Clearstream custodian business and lower costs.
Write to Ulrike Dauer at ulrike.dauer@dowjones.com