-NYSE having "comprehensive" discussion around technology
business, CEO says
-NYSE evaluating technology unit's future with merger partner
ICE
-Company profits rise 15% to $139 million, lifted by derivatives
trade
NYSE Euronext (NYX) is conducting a wide-ranging analysis of its
technology division that has struggled in recent quarters,
according to the company's top executives.
The Big Board parent is discussing the future of the unit with
agreed acquirer IntercontinentalExchange Inc. (ICE) and other
potential "partners" and clients, NYSE Chief Executive Duncan
Niederauer said Tuesday.
"These are much more complicated discussions than [just] a
product sale," Mr. Niederauer told analysts on a conference call
discussing the exchange group's first-quarter financial results.
"This is a much more comprehensive discussion."
NYSE on Tuesday posted a 15% jump in first-quarter profit,
lifted by improved trading volumes in the company's flagship
derivatives markets and progress in a yearlong effort to trim
costs.
NYSE was reported this week to have explored selling parts of
its technology wing, which Mr. Niederauer has positioned as one of
three key pillars of the company, supported by high-tech data
center facilities and a range of data services.
Profits from that division fell 11% in the first quarter to $112
million, NYSE said Tuesday, and Mr. Niederauer said the climate
remained "challenging" for technology sales. Late last year the
company abandoned its target to generate $1 billion in annual
revenue from the division.
Executives for NYSE said the trading-technology business is
changing as trading firms migrate to cloud-based services and
scrutinize the fixed costs sunk into hardware that powers their
systems. NYSE last summer installed Jon Robson to lead the division
and executives on Tuesday dismissed talk of breaking up the
division as speculative.
"It's in our competitors' interest to fan those flames," said
Lawrence Leibowitz, chief operating officer, speaking on the
conference call.
In December, NYSE agreed to be acquired by
IntercontinentalExchange in a deal seen creating the world's
biggest exchange operator by market value. The companies scheduled
shareholder meetings for June 3 to vote on the deal.
NYSE's net income rose to $139 million in the three months ended
March 31, up from $121 million a year earlier. Derivatives-trading
profits jumped 32% to $104 million, boosted by market volatility
spurred by the Cyprus bailout and the Italian elections.
Net revenue was roughly flat at $600 million, compared with $601
million in the same quarter last year. The company was hit by a $1
million loss from foreign-exchange fluctuations, as NYSE Euronext
collects some fees in euros and U.K. pounds. Slower turnover in
U.S. and European stock markets pushed equities-related revenues 7%
lower to $558 million.
Per-share earnings rose 21% to 57 cents from 47 cents a year
earlier.
Write to Noemie Bisserbe at noemie.bisserbe@dowjones.com and
Jacob Bunge at jacob.bunge@dowjones.com
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