Stock exchange operator NYSE Euronext said Friday that it was well positioned for 2012 and beyond despite a tough near-term outlook for trading volume and currencies, as it reported an almost 19 percent fall in fourth-quarter net profit.
Net profit for the period fell to $110 million from $135 million a year earlier, hit by merger costs and a tax settlement charge. Fourth-quarter revenue rose to $628 million from $613 million.
Results for the fourth quarter of 2011 and 2010 include $46 million and $18 million, respectively, of pretax merger expenses and exit costs, the company said.
After its failed tie-up with German bourse Deutsche Borse, NYSE Euronext is launching a two-year plan aimed at lifting profit and promised to give investors details in April.
"We are continuing to focus on those areas of our business model that we control to create value for shareholders. We are targeting a two-year plan that, with only modest improvement in the operating environment, will drive higher levels of earnings per share growth through a combination of targeted revenue growth initiatives, accelerated cost efficiency efforts and disciplined deployment of capital," Chief Financial Officer Michael Geltzeiler said.
Details of the two-year plan will be provided in April on investor day, he said.
Fourth-quarter net revenue from the exchange's derivatives unit was $186 million, marginally lower than in the same period last year, including a $1 million hit from currency fluctuations. The company attributed the slight revenue fall to lower European derivatives trading volume, partially offset by higher average net revenue per contract.
Revenue related to information services and technological solutions rose 11 percent in the fourth quarter to $127 million. The result includes a $9 million gain from currency fluctuations, NYSE Euronext said.
NYSE Euronext now needs to lay out a new standalone strategy following the collapse of its blockbuster merger with Deutsche Borse.
The EU Commission blocked NYSE Euronext's merger plans with Deutsche Borse earlier this month on antitrust grounds, as the combined company would have had a dominant 93 percent share of Europe's on-exchange derivatives business.
NYSE Euronext, Deutsche Borse, Chief Financial Officer Michael Geltzeiler, revenue growth, merger costs, derivatives trading
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