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Nasdaq (NDAQ) Q3 Earnings Meet, Revenues Lag Estimates
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Nasdaq, Inc. (NDAQ - Free Report) posted third-quarter 2016 earnings of 91 cents per share, in line with the Zacks Consensus Estimate. The bottom line improved 3.4% from 88 cents per share earned in the prior-year quarter. The impressive results were driven by impressive operational activities, strong listings and IPOs. Share buybacks also added to the upside.
Including one-time items, net income came in at 77 cents per share, down 3.7% year over year.
Revenues increased 11% to a record $585 million but missed the Zacks Consensus Estimate of $587 million. The increase was driven by a $58 million positive impact from acquisitions.
Detailed Analysis
Segment-wise, net exchange revenues at Market Services increased 6.5% from the year-ago quarter to $213 million. The upside was driven by an increase in revenues from the ISE and Nasdaq CXC acquisitions. Revenues from Listing Services inched up 3% year over year to $68 million on higher revenues in the Nordics due to new company listings. Technology Solutions revenues rose 27% to $167 million upon inclusion of revenues from the acquisitions of Marketwired and Boardvantage, and a $13 million organic revenue growth in Market Technology business. Information Services’ generated revenues of $137 million, up 3.8% year over year.
Nasdaq’s order intakes plunged 41% to $49 million. Additionally, total order value (the value of orders signed but not recognized as revenues) of $ $738 million was flat year over year. New listings, including 31 IPOs, totaled 79.
Adjusted operating expenses were $317 million, up 15% year over year. Operating expenses of $29 million associated with acquisitions in 2016 and $13 million for organic growth resulted in the increase in expenses.
Out of $60 million intended, Nasdaq achieved $23 million in annualized run-rate cost synergies for acquisitions as on Sep 30, 2016.
Financial Update
As of Sep 30, 2016, Nasdaq had cash and cash equivalents of $276 million. This is around 22% lower than $357 million at year-end 2015. Net debt during the quarter increased 56% over the 2015-end level to $3.7 billion as of Sep 30, 2016.
Nasdaq’s total assets increased 25% to $14.8 billion as of Sep 30, 2016 from $11.9 billion at year-end 2015. Total equity inched up 1.8% to $5.7 billion from $5.61 billion at the end of 2015.
Capital Deployment
Nasdaq spent $16 million to buy back 0.8 million shares during the reported quarter. As of Sep 30, the company had $429 million remaining under its authorization.
On Oct 26, 2016, the company’s board of directors announced a quarterly dividend of 32 cents per share. The dividend will be paid on Dec 30, to shareholders on record as of Dec 16, 2016.
Among other players in the insurance industry that have reported their third-quarter earnings so far, earnings at Progressive Corp. (PGR - Free Report) and MGIC Investment Corp. (MTG - Free Report) beat their respective Zacks Consensus Estimate, while RLI Corp. (RLI - Free Report) missed the same.
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Nasdaq (NDAQ) Q3 Earnings Meet, Revenues Lag Estimates
Nasdaq, Inc. (NDAQ - Free Report) posted third-quarter 2016 earnings of 91 cents per share, in line with the Zacks Consensus Estimate. The bottom line improved 3.4% from 88 cents per share earned in the prior-year quarter. The impressive results were driven by impressive operational activities, strong listings and IPOs. Share buybacks also added to the upside.
Including one-time items, net income came in at 77 cents per share, down 3.7% year over year.
Revenues increased 11% to a record $585 million but missed the Zacks Consensus Estimate of $587 million. The increase was driven by a $58 million positive impact from acquisitions.
Detailed Analysis
Segment-wise, net exchange revenues at Market Services increased 6.5% from the year-ago quarter to $213 million. The upside was driven by an increase in revenues from the ISE and Nasdaq CXC acquisitions. Revenues from Listing Services inched up 3% year over year to $68 million on higher revenues in the Nordics due to new company listings. Technology Solutions revenues rose 27% to $167 million upon inclusion of revenues from the acquisitions of Marketwired and Boardvantage, and a $13 million organic revenue growth in Market Technology business. Information Services’ generated revenues of $137 million, up 3.8% year over year.
Nasdaq’s order intakes plunged 41% to $49 million. Additionally, total order value (the value of orders signed but not recognized as revenues) of $ $738 million was flat year over year. New listings, including 31 IPOs, totaled 79.
Adjusted operating expenses were $317 million, up 15% year over year. Operating expenses of $29 million associated with acquisitions in 2016 and $13 million for organic growth resulted in the increase in expenses.
Out of $60 million intended, Nasdaq achieved $23 million in annualized run-rate cost synergies for acquisitions as on Sep 30, 2016.
Financial Update
As of Sep 30, 2016, Nasdaq had cash and cash equivalents of $276 million. This is around 22% lower than $357 million at year-end 2015. Net debt during the quarter increased 56% over the 2015-end level to $3.7 billion as of Sep 30, 2016.
Nasdaq’s total assets increased 25% to $14.8 billion as of Sep 30, 2016 from $11.9 billion at year-end 2015. Total equity inched up 1.8% to $5.7 billion from $5.61 billion at the end of 2015.
Capital Deployment
Nasdaq spent $16 million to buy back 0.8 million shares during the reported quarter. As of Sep 30, the company had $429 million remaining under its authorization.
On Oct 26, 2016, the company’s board of directors announced a quarterly dividend of 32 cents per share. The dividend will be paid on Dec 30, to shareholders on record as of Dec 16, 2016.
Zacks Rank
Nasdaq carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
NASDAQ INC Price, Consensus and EPS Surprise
NASDAQ INC Price, Consensus and EPS Surprise | NASDAQ INC Quote
Performance of Other Stocks from Finance Sector
Among other players in the insurance industry that have reported their third-quarter earnings so far, earnings at Progressive Corp. (PGR - Free Report) and MGIC Investment Corp. (MTG - Free Report) beat their respective Zacks Consensus Estimate, while RLI Corp. (RLI - Free Report) missed the same.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>