01—Abstract
Summary
Summary of the 10-Q filed August 4, 2010. Cited figures are marked; the original filing is the authoritative source.
The NASDAQ OMX Group, Inc. (NDAQ) reported its financial results for the quarter and six months ended June 30, 2010.
For the second quarter, the company saw an increase in revenues less liquidity rebates, brokerage, clearance and exchange fees to $390 milliona, a 6.3% rise from the prior year, driven by strong performance in Market Services, particularly U.S. cash equity trading and European derivative trading. Total operating expenses saw an increase, largely influenced by a $40 million charge related to the repayment of senior secured credit facilities in January 2010.
Despite this, the company's net income attributable to NASDAQ OMX for the quarter was $96 millionb, resulting in diluted earnings per share of $0.46. The company also highlighted its proactive approach to capital management, including a $300 million share repurchase program and a new $950 million credit facility.
02—Key points
Key Highlights
- Revenues less liquidity rebates, brokerage, clearance and exchange fees increased by 6.3% to $390 million for Q2 2010 compared to Q2 2009, primarily driven by Market Services.
- Net income attributable to NASDAQ OMX was $96 million for Q2 2010, leading to diluted EPS of $0.46.
- The company experienced a significant charge of $40 million in the first six months of 2010 related to the repayment of senior secured credit facilities.
- Acquisitions during the period included Nord Pool ASA and North American Energy Credit and Clearing Corp., expanding the company's commodities and clearing offerings.
- The company announced and continued its share repurchase program, authorizing up to $300 million in repurchases, with $200 million executed by June 30, 2010.
- A new $950 million senior unsecured credit facility was established in January 2010, alongside the issuance of $1 billion in senior unsecured notes.
- Goodwill remained substantial at $4.5 billion, with no impairment recognized in the period.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2010, Nasdaq, Inc. kept $0.11.
- Revenue$886.0M100.0%
- Cost of revenue−$496.0M56.0%
- Gross profit$390.0M44.0%
- Operating costs−$211.0M23.8%
- Operating income$179.0M20.2%
- Interest, other & tax−$83.0M9.4%
- Net income$96.0M10.8%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2010filed August 4, 2010Financial Statements
Q2 FY2010 against Q2 FY2009
| Line item | Q2 FY2010Q2 FY2009 | Change |
|---|---|---|
| Revenue | $886.00M$889.00M | −0.3% |
| Cost of Revenue | $496.00M$522.00M | −5.0% |
| Gross Profit | $390.00M$367.00M | +6.3% |
| Operating Expenses | $211.00M$208.00M | +1.4% |
| Operating Income | $179.00M$159.00M | +12.6% |
| Interest Expense | $26.00M$25.00M | +4.0% |
| Net Income | $96.00M$69.00M | +39.1% |
| EPS (Basic) | $0.15$0.11 | +35.3% |
| EPS (Diluted) | $0.15$0.11 | +39.4% |
| Shares Outstanding (Basic) | 616.55M— | — |
| Shares Outstanding (Diluted) | 628.24M— | — |
05—Questions
Frequently Asked Questions
How did NASDAQ OMX's revenue performance compare to the previous year?
For the second quarter of 2010, revenues less liquidity rebates, brokerage, clearance and exchange fees increased by 6.3% to $390 million compared to the same period in 2009. This growth was primarily attributed to an increase in Market Services revenues.
What were the significant expenses or charges impacting profitability?
A notable charge of $40 million was incurred in the first six months of 2010 related to the repayment of senior secured credit facilities. Additionally, losses on divestitures totaling $11 million were recorded due to the closure of NEURO and Agora-X businesses.
What is the company's capital management strategy, particularly regarding share repurchases?
NASDAQ OMX has an active share repurchase program. In March 2010, a program authorizing up to $300 million in repurchases was announced, and by June 30, 2010, $200 million had been executed. In July 2010, an additional $100 million authorization was approved, bringing the total available for repurchase to $200 million.
Has the company undertaken any strategic acquisitions or divested any businesses?
Yes, in 2010, NASDAQ OMX acquired Nord Pool ASA, a derivatives trading market, and North American Energy Credit and Clearing Corp., a clearinghouse for OTC power and gas markets. The company also made a strategic decision to close its Agora-X and NEURO businesses, recording associated losses.
06—Continue