NYSE Euronext, the U.S. exchange operator being bought by IntercontinentalExchange Inc., reported first-quarter earnings that met analyst estimates as trading revenue increased and operating expenses declined.
Net income rose 45% to $126 million from $87 million a year earlier, the New York-based company said today in a statement. Earnings excluding some items were 57 cents a share, compared with the 56-cent mean estimate of analysts surveyed by Bloomberg. The 13 projections ranged from 53 cents to 58 cents.
Earnings at the 220-year-old NYSE rose for the first time in five quarters as the company reduced expenses. IntercontinentalExchange, a 12-year-old energy and commodity futures bourse, agreed in December to acquire NYSE, the owner of the largest American equity exchange, in an $8.2 billion deal set to close in the second half of this year.
“We see this expense-driven beat as a positive as NYSE is delivering on the one clear front within its control in a still uncertain trading environment,” Chris Allen, an analyst at Evercore Partners Inc. in New York, wrote in a report today.
NYSE shares were little changed at $38.66 as of 10:28 a.m. New York time today. They’ve gained 23% this year, almost twice the Bloomberg World Exchanges Index of 26 companies. IntercontinentalExchange, known as ICE, slipped less than 0.1% to $161.74. The company has risen 31% in 2013, the second most in the index.
NYSE has been cutting costs in a plan known as Project 14 meant to eliminate $250 million of expenses by the end of 2014, after European regulators barred the exchange from a planned merger with Deutsche Boerse AG in February 2012. Chief Financial Officer Michael Geltzeiler said on a conference call with analysts today that the company expects 2013 expenses to be lower than the $1.525 billion forecast.
Net revenue from derivatives increased 14% to $201 million as volume rose. Equity trading revenue, excluding regulatory fees and liquidity payments, fell 5.6% to $287 million, NYSE said today.
Operating expenses excluding merger costs, exit costs and some charges for fair value adjustment dropped 6.2% to $380 million.