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Nasdaq (NDAQ) Beats on Q3 Earnings, Tweaks Expense View
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Nasdaq, Inc. (NDAQ - Free Report) reported third-quarter 2018 adjusted earnings per share of $1.15, beating the Zacks Consensus Estimate of $1.14. The bottom line also improved 14% year over year.
The company witnessed solid growth in market technology, index and analytics during the third quarter.
Performance in Detail
Nasdaq’s revenues of $600 million slipped 0.5% year over year, largely attributable to the divestiture of Public Relations Solutions and Digital Media Services businesses and a $- million unfavorable impact from changes in foreign exchange rates. However, a 5% impact from organic growth and a positive $22-million effect from the inclusion of revenues related to the acquisition of eVestment limited the downside. The top line lagged the Zacks Consensus Estimate by 1.1%.
Adjusted operating expenses were $311 million in the reported quarter, down 1% from the year-ago period owing to the divestment of the Public Relations Solutions and Digital Media Services businesses and a $6-million favorable impact from changes in forex rates.
Nasdaq projects 2018 non-GAAP operating expense in the range of $1.310-$1.325 billion, lowering the higher end of the earlier guided band of $1.310-$1.335 billion, which in turn, reflects strong organic growth.
The Nasdaq Stock Market welcomed 85 new listings, 52 of which were IPOs.
Segment-wise, net revenues at Market Services inched up nearly 1% from the year-ago quarter to $222 million. This upside was driven by improved revenues from equity derivatives and cash equity trading, partially offset by a lower fixed income and commodities trading plus clearing and trade management services.
Revenues at Corporate Services grew 4% year over year to $131 million, mainly on the back of a rise in Corporate Solutions revenues and Listings Services revenues.
Information Services revenues rose 19% year over year to $179 million. Lower revenues at Market Data Products were offset by higher Index revenues as well as Investment Data & Analytics revenues.
Revenues at Market Technology improved 10% year over year to $68 million, banking on higher U.S. industry trading volumes and net capture rate, partially offset by a lower U.S. market share. Market Technology order intake totaled $149 million through the first nine months of 2018.
Financial Update
Nasdaq had cash and cash equivalents of $324 million as of Sep 30, 2018, down 14.1% from 2017-end level. As of Jun 30, 2018, long-term debt reduced 17.6% over 2017-end level to $3.1 billion.
Share Repurchase Update
During the quarter under review, the company bought back shares worth $54 million. As of Jun 30, 2018, the company had $332 million shares remaining under its repurchase authorization.
Business Update
Nasdaq has agreed to acquire Cinnober, a technology provider for $190 million in cash. The acquisition will consolidate the company’s presence as an ace infrastructure technology provider.
The company has also announced to divest 5% interest in LCH Group Holdings Limited.
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. It is intensifying its focus on ramping up its foothold as a technology and analytics provider. 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 third-quarter earnings so far, the bottom line of American Express Company (AXP - Free Report) , Alliance Data System Corporation and MarketAxess Holdings Inc. (MKTX - Free Report) beat the respective Zacks Consensus Estimate.
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Image: Bigstock
Nasdaq (NDAQ) Beats on Q3 Earnings, Tweaks Expense View
Nasdaq, Inc. (NDAQ - Free Report) reported third-quarter 2018 adjusted earnings per share of $1.15, beating the Zacks Consensus Estimate of $1.14. The bottom line also improved 14% year over year.
Nasdaq, Inc. Price, Consensus and EPS Surprise
Nasdaq, Inc. Price, Consensus and EPS Surprise | Nasdaq, Inc. Quote
The company witnessed solid growth in market technology, index and analytics during the third quarter.
Performance in Detail
Nasdaq’s revenues of $600 million slipped 0.5% year over year, largely attributable to the divestiture of Public Relations Solutions and Digital Media Services businesses and a $- million unfavorable impact from changes in foreign exchange rates. However, a 5% impact from organic growth and a positive $22-million effect from the inclusion of revenues related to the acquisition of eVestment limited the downside. The top line lagged the Zacks Consensus Estimate by 1.1%.
Adjusted operating expenses were $311 million in the reported quarter, down 1% from the year-ago period owing to the divestment of the Public Relations Solutions and Digital Media Services businesses and a $6-million favorable impact from changes in forex rates.
Nasdaq projects 2018 non-GAAP operating expense in the range of $1.310-$1.325 billion, lowering the higher end of the earlier guided band of $1.310-$1.335 billion, which in turn, reflects strong organic growth.
The Nasdaq Stock Market welcomed 85 new listings, 52 of which were IPOs.
Segment-wise, net revenues at Market Services inched up nearly 1% from the year-ago quarter to $222 million. This upside was driven by improved revenues from equity derivatives and cash equity trading, partially offset by a lower fixed income and commodities trading plus clearing and trade management services.
Revenues at Corporate Services grew 4% year over year to $131 million, mainly on the back of a rise in Corporate Solutions revenues and Listings Services revenues.
Information Services revenues rose 19% year over year to $179 million. Lower revenues at Market Data Products were offset by higher Index revenues as well as Investment Data & Analytics revenues.
Revenues at Market Technology improved 10% year over year to $68 million, banking on higher U.S. industry trading volumes and net capture rate, partially offset by a lower U.S. market share. Market Technology order intake totaled $149 million through the first nine months of 2018.
Financial Update
Nasdaq had cash and cash equivalents of $324 million as of Sep 30, 2018, down 14.1% from 2017-end level. As of Jun 30, 2018, long-term debt reduced 17.6% over 2017-end level to $3.1 billion.
Share Repurchase Update
During the quarter under review, the company bought back shares worth $54 million. As of Jun 30, 2018, the company had $332 million shares remaining under its repurchase authorization.
Business Update
Nasdaq has agreed to acquire Cinnober, a technology provider for $190 million in cash. The acquisition will consolidate the company’s presence as an ace infrastructure technology provider.
The company has also announced to divest 5% interest in LCH Group Holdings Limited.
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. It is intensifying its focus on ramping up its foothold as a technology and analytics provider. 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 third-quarter earnings so far, the bottom line of American Express Company (AXP - Free Report) , Alliance Data System Corporation and MarketAxess Holdings Inc. (MKTX - Free Report) beat the respective Zacks Consensus Estimate.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics.
Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>