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Nasdaq (NDAQ) Beats on Q2 Earnings, Revises Expense Guidance
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Nasdaq, Inc. (NDAQ - Free Report) reported second-quarter 2018 adjusted earnings per share of $1.18, beating the Zacks Consensus Estimate of $1.17. The bottom line also improved 17% year over year.
Improved revenues and higher volumes aided this upside. The company witnessed revenue improvement across all its segments.
Performance in Detail
Nasdaq’s revenues of $615 million improved 3% year over year, driven by 7% organic revenue growth and a 1% positive impact from changes in forex, partially offset by a 5% revenue reduction due to the net impact of divestiture and acquisition of businesses. The top line lagged the Zacks Consensus Estimate of $621 million.
Adjusted operating expenses were $325 million in the reported quarter, up 5% from the year-ago period. This includes a $20 million increase from acquisitions, a $16-million organic expense rise and a $4-million unfavorable impact from the changes in foreign exchange rates.
Operating margin contracted 100 bps year over year to 47%.
Nasdaq projects 2018 non-GAAP operating expense in the range of $1.310-$1.335 billion, lifting the lower end of the earlier guided range of $1.295-$1.335 billion, which in turn, reflects strong organic growth.
The Nasdaq Stock Market welcomed 89 new listings, 56 of which, were IPOs.
Segment-wise, net revenues at Market Services increased 7% from the year-ago quarter to $237 million. This upside was driven by improved revenues from equity derivatives, cash equity trading, fixed income and commodities trading plus clearing and trade management services.
Revenues at Corporate Services grew 7% year over year to $131 million, mainly owing to a rise in Corporate Solutions revenues and Listings Services revenues.
Information Services revenues rose 22% year over year to $175 million. Higher revenues at Data Products as well as Index Licensing and Services drove this uptick.
Revenues at Market Technology improved 14% year over year to $66 million on the back of organic growth in delivery and support revenues as well as higher software service revenues. Market Technology order intake totaled $64 million.
Financial Update
Nasdaq had cash and cash equivalents of $322 million as of Jun 30, 2018, down 14.6% from 2017-end level. As of Jun 30, 2018, long-term debt decreased 17.4% over 2017-end level to $3.1 billion.
Share Repurchase Update
During the quarter under review, the company bought back shares worth $241 million. As of Jun 30, 2018, the company had $386 million shares remaining under its repurchase authorization.
Business Highlights
O Apr 16, 2018, Nasdaq closed the sale of its Public Relations Solutions and Digital Media Services businesses to West Corporation.
Our Take
Nasdaq’s solid results are encouraging. Growth looks impressive as the company remains focused on expansion through acquisitions and organic initiatives, which enable the entry and opening up of cross-selling opportunities into new markets. The top line should also benefit from the company’s consistent focus on its strategy to grow the non-transaction revenue base including technology, listing and information revenues.
Performance of Other Companies From Finance Sector
Among other players from the finance sector, having reported second-quarter earnings so far, the bottom line of American Express Company (AXP - Free Report) and Alliance Data System Corporation beat the respective Zacks Consensus Estimate while The Travelers Companies, Inc.’s (TRV - Free Report) earnings missed the same.
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It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
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Nasdaq (NDAQ) Beats on Q2 Earnings, Revises Expense Guidance
Nasdaq, Inc. (NDAQ - Free Report) reported second-quarter 2018 adjusted earnings per share of $1.18, beating the Zacks Consensus Estimate of $1.17. The bottom line also improved 17% year over year.
Nasdaq, Inc. Price, Consensus and EPS Surprise
Nasdaq, Inc. Price, Consensus and EPS Surprise | Nasdaq, Inc. Quote
Improved revenues and higher volumes aided this upside. The company witnessed revenue improvement across all its segments.
Performance in Detail
Nasdaq’s revenues of $615 million improved 3% year over year, driven by 7% organic revenue growth and a 1% positive impact from changes in forex, partially offset by a 5% revenue reduction due to the net impact of divestiture and acquisition of businesses. The top line lagged the Zacks Consensus Estimate of $621 million.
Adjusted operating expenses were $325 million in the reported quarter, up 5% from the year-ago period. This includes a $20 million increase from acquisitions, a $16-million organic expense rise and a $4-million unfavorable impact from the changes in foreign exchange rates.
Operating margin contracted 100 bps year over year to 47%.
Nasdaq projects 2018 non-GAAP operating expense in the range of $1.310-$1.335 billion, lifting the lower end of the earlier guided range of $1.295-$1.335 billion, which in turn, reflects strong organic growth.
The Nasdaq Stock Market welcomed 89 new listings, 56 of which, were IPOs.
Segment-wise, net revenues at Market Services increased 7% from the year-ago quarter to $237 million. This upside was driven by improved revenues from equity derivatives, cash equity trading, fixed income and commodities trading plus clearing and trade management services.
Revenues at Corporate Services grew 7% year over year to $131 million, mainly owing to a rise in Corporate Solutions revenues and Listings Services revenues.
Information Services revenues rose 22% year over year to $175 million. Higher revenues at Data Products as well as Index Licensing and Services drove this uptick.
Revenues at Market Technology improved 14% year over year to $66 million on the back of organic growth in delivery and support revenues as well as higher software service revenues. Market Technology order intake totaled $64 million.
Financial Update
Nasdaq had cash and cash equivalents of $322 million as of Jun 30, 2018, down 14.6% from 2017-end level. As of Jun 30, 2018, long-term debt decreased 17.4% over 2017-end level to $3.1 billion.
Share Repurchase Update
During the quarter under review, the company bought back shares worth $241 million. As of Jun 30, 2018, the company had $386 million shares remaining under its repurchase authorization.
Business Highlights
O Apr 16, 2018, Nasdaq closed the sale of its Public Relations Solutions and Digital Media Services businesses to West Corporation.
Our Take
Nasdaq’s solid results are encouraging. Growth looks impressive as the company remains focused on expansion through acquisitions and organic initiatives, which enable the entry and opening up of cross-selling opportunities into new markets. The top line should also benefit from the company’s consistent focus on its strategy to grow the non-transaction revenue base including technology, listing and information revenues.
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.
Performance of Other Companies From Finance Sector
Among other players from the finance sector, having reported second-quarter earnings so far, the bottom line of American Express Company (AXP - Free Report) and Alliance Data System Corporation beat the respective Zacks Consensus Estimate while The Travelers Companies, Inc.’s (TRV - Free Report) earnings missed the same.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>