UPDATE: NYSE Euronext Swings To $182 Million 2Q Loss On LCH Charge
30 Luglio 2009 - 1:39PM
Dow Jones News
NYSE Euronext (NYX) on Thursday reported a net loss of $182
million for the second quarter, driven by charges for staff cuts
and a new clearing deal, though the company pledged to exceed its
cost-saving target for the year.
A modest rise in revenue from the prior quarter and lower
expenses year-on-year was wiped out by the $355 million paid to
LCH.Clearnet Group Ltd. under a deal that sees the stock market and
derivatives exchange operator take more of its clearing
in-house.
It's the first time NYSE Euronext has disclosed the scale of the
compensation paid to LCH, though Chief Executive Duncan Niederauer
said the move "is expected to generate revenues in excess of $100
million annually and is anticipated to be accretive in 2009, and
the staffing reductions we have made will result in significant
future cost savings."
The cost of staff cuts in the U.S. and Europe also weighed on
the quarter, though earnings were ahead of consensus excluding
special charges, and the company said it would beat its target of
extracting $100 million in synergies this year from the acquisition
of the American Stock Exchange.
The reported net loss of $182 million, or 70 cents a share,
compared with a $195 million profit in the second quarter of 2008.
Excluding one-off charges, a 51-cent surplus in the latest quarter
was ahead of the 45-cent consensus among analysts.
NYSE Euronext, like rivals, has been paring expenses to counter
intensifying competition in the cash equities business and a slide
in volume of some its core derivatives products, its largest
business segment by revenue.
The company is cutting almost 300 staff, a move that helped cut
fixed costs by 6% compared with a year ago.
Revenue rose to $1.125 billion from $1.03 billion a year ago and
$1.1 billion in the prior quarter, with the company citing the
positive impact of pricing changes for the sequential
improvement.
-By A.H. Mooradian, Dow Jones Newswires; +33 1 4017 1740;
art.mooradian@dowjones.com
(Doug Cameron contributed to this article)