Nasdaq profits fall, but revenues rise on acquisitions

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Third-quarter profits fell, but revenues rose at Nasdaq

The company’s earnings dropped to $ 131 million, or 77 cents a share, down from $ 138 million, or 80 cents a share, a year earlier. Excluding restructuring and acquisition-related charges and other items, per-share earnings rose to 91 cents.

Revenue increased to 11% to $ 585 million, Nasdaq said on October 26. Analysts polled by Thomson Reuters expected a per-share profit of 90 cents on revenue of $ 586.2 million.

Nasdaq has transformed from a US-focused exchange operator to a global business-services company that includes markets in the US, Canada and the Nordic region, as well as investor, public relations, technology and data services.

This year, it closed deals to buy Chi-X Canada, an alternative trading system for the Toronto Stock Exchange, and news release distributor Marketwired. The financial terms of those deals weren’t disclosed. In May, it bought board portal systems provider Boardvantage for $ 200 million and in June it bought options-exchange operator International Securities Exchange for $ 1.1 billion.

Acquisitions added $ 58 million to revenue in the quarter.

Chief executive Bob Greifeld said the quarter showed how the company’s varied businesses allowed it to adapt to changing market conditions. While lower volatility and trading volumes hurt results in its marketplace segments, its non-trading units had growth.

Last summer, markets were affected by large swings in the Chinese stock market. Exchanges benefit more from periods of heightened trading and volatility because the more people trade, the more fees exchanges collect on transactions.

Market services revenue, which contributed 36% of the exchange’s top line, increased 6.5% on acquisitions, partially offset by lower volumes.

The company’s technology solutions segment, which includes exchange technology for operators around the world and compliance surveillance software, posted 28% growth on the deals as well as increased software licensing and support fees and surveillance.

The company’s information-services segment, which represented 23% of the top line and provides data and indexes to clients, reported a revenue increase of 3.8% due to acquisitions and growth in proprietary data products, partially offset by declines in indexes due to lower volumes.

Listing services revenue increased 3% due to more Nordic listings.

Write to Austen Hufford at austen.hufford@wsj.com

This story was first published by The Wall Street Journal

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