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Nasdaq (NDAQ) Q4 Adjusted Earnings Beat, Revenue Up Y/Y
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Nasdaq, Inc. (NDAQ - Free Report) reported fourth-quarter 2016 adjusted earnings per share of 95 cents per share, beating the Zacks Consensus Estimate by a penny. Also, the bottom line improved 7% year over year.
Results were driven by higher revenues, with growth across all segments. However, on the downside, the quarter experienced higher expenses.
Adjusted net income for fourth-quarter 2016 came in at $161 million, up 7.3% year over year.
On a GAAP basis, the company reported net loss of $224 million or a loss of $1.35 per share, compared with net income of $148 million or 88 cents per share, in the prior-year quarter.
Performance in Detail
Nasdaq’s revenues of $599 million for the reported quarter increased 12% year over year. The Zacks Consensus Estimate was $599.8 million. The increase was driven by a $54-million positive impact from acquisitions.
Adjusted operating expenses were $324 million, up 13.7% year over year. This rise mainly reflects $29 million of incremental operating expenses from the acquisitions closed in 2016. Notably, the company expects 2017 non-GAAP operating expense in the range of $1.26–$1.31 billion.
Nasdaq realigned its reporting segments to combine Listing Services and Corporate Solutions into a new 'Corporate Services' segment, while Market Technology is now a separate segment. Also the company combined its U.S. and European fixed income products and services under a single brand called Nasdaq Fixed Income.
Segment wise, net revenues at Market Services jumped 12.8% from the year-ago quarter to $220 million. The rise was driven by higher revenues from the ISE and Nasdaq CXC acquisitions, partially offset by lower market share in the U.S. equity derivatives and U.S. cash equities businesses.
Revenues at Corporate Services climbed 16.8% year over year to $167 million. The increase mainly reflects inclusion of revenues from the Marketwired and Boardvantage acquisitions in the Corporate Solutions business as well as higher revenues from listing services.
Information Services’ revenues rose 6.3% year over year to $135 million. Higher proprietary data products revenues and the inclusion of revenues from the acquisitions of ISE and Nasdaq CXC led to increased data products revenues. Additionally, revenues from index licensing and services increased from the prior-year quarter.
Revenues at Market Technology increased 8.5% year over year to $77 million, reflecting organic revenue growth.
During 2016, Market Technology order intake totaled $276 million. This includes $136 million in fourth-quarter 2016. The Nasdaq Stock Market witnessed 283 new listings during the year, including 91 IPOs.
As of Dec 31, 2016, Nasdaq achieved $38 million in annualized run-rate cost synergies for the acquisitions in 2016 out of the targeted $60 million.
Nasdaq had cash and cash equivalents of $403 million as of Dec 31, 2016. Net debt increased 55.1% over the 2015-end level to $3.2 billion.
Our Take
Nasdaq’s results reflect decent performance. Growth looks encouraging as the company remains focused on expansion through acquisitions and organic initiatives that enable entry and cross-selling opportunities into new markets. Top line should also benefit from the company’s consistent focus on its strategy to accelerate its non-transaction revenue base, which includes technology, listing and information revenues. However, higher expenses and stiff competition remain key concerns.
Among others, CME Group Inc. (CME - Free Report) , CBOE Holdings, Inc. (CBOE - Free Report) and Intercontinental Exchange, Inc. (ICE - Free Report) are expected to release results around Feb 2, Feb 6 and Feb 7, respectively.
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Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>
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Nasdaq (NDAQ) Q4 Adjusted Earnings Beat, Revenue Up Y/Y
Nasdaq, Inc. (NDAQ - Free Report) reported fourth-quarter 2016 adjusted earnings per share of 95 cents per share, beating the Zacks Consensus Estimate by a penny. Also, the bottom line improved 7% year over year.
Results were driven by higher revenues, with growth across all segments. However, on the downside, the quarter experienced higher expenses.
Adjusted net income for fourth-quarter 2016 came in at $161 million, up 7.3% year over year.
On a GAAP basis, the company reported net loss of $224 million or a loss of $1.35 per share, compared with net income of $148 million or 88 cents per share, in the prior-year quarter.
Performance in Detail
Nasdaq’s revenues of $599 million for the reported quarter increased 12% year over year. The Zacks Consensus Estimate was $599.8 million. The increase was driven by a $54-million positive impact from acquisitions.
Adjusted operating expenses were $324 million, up 13.7% year over year. This rise mainly reflects $29 million of incremental operating expenses from the acquisitions closed in 2016. Notably, the company expects 2017 non-GAAP operating expense in the range of $1.26–$1.31 billion.
Nasdaq realigned its reporting segments to combine Listing Services and Corporate Solutions into a new 'Corporate Services' segment, while Market Technology is now a separate segment. Also the company combined its U.S. and European fixed income products and services under a single brand called Nasdaq Fixed Income.
Segment wise, net revenues at Market Services jumped 12.8% from the year-ago quarter to $220 million. The rise was driven by higher revenues from the ISE and Nasdaq CXC acquisitions, partially offset by lower market share in the U.S. equity derivatives and U.S. cash equities businesses.
Revenues at Corporate Services climbed 16.8% year over year to $167 million. The increase mainly reflects inclusion of revenues from the Marketwired and Boardvantage acquisitions in the Corporate Solutions business as well as higher revenues from listing services.
Information Services’ revenues rose 6.3% year over year to $135 million. Higher proprietary data products revenues and the inclusion of revenues from the acquisitions of ISE and Nasdaq CXC led to increased data products revenues. Additionally, revenues from index licensing and services increased from the prior-year quarter.
Revenues at Market Technology increased 8.5% year over year to $77 million, reflecting organic revenue growth.
During 2016, Market Technology order intake totaled $276 million. This includes $136 million in fourth-quarter 2016. The Nasdaq Stock Market witnessed 283 new listings during the year, including 91 IPOs.
As of Dec 31, 2016, Nasdaq achieved $38 million in annualized run-rate cost synergies for the acquisitions in 2016 out of the targeted $60 million.
Nasdaq had cash and cash equivalents of $403 million as of Dec 31, 2016. Net debt increased 55.1% over the 2015-end level to $3.2 billion.
Our Take
Nasdaq’s results reflect decent performance. Growth looks encouraging as the company remains focused on expansion through acquisitions and organic initiatives that enable entry and cross-selling opportunities into new markets. Top line should also benefit from the company’s consistent focus on its strategy to accelerate its non-transaction revenue base, which includes technology, listing and information revenues. However, higher expenses and stiff competition remain key concerns.
Nasdaq, Inc. Price, Consensus and EPS Surprise
Nasdaq, Inc. Price, Consensus and EPS Surprise | Nasdaq, Inc. Quote
Nasdaq carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Among others, CME Group Inc. (CME - Free Report) , CBOE Holdings, Inc. (CBOE - Free Report) and Intercontinental Exchange, Inc. (ICE - Free Report) are expected to release results around Feb 2, Feb 6 and Feb 7, respectively.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>