Earnings Preview: Nasdaq Stock Market

Nasdaq Stock Market Inc. is slated to report results for the fourth quarter Thursday before the opening bell. Following is a summary of key developments and analyst commentary related to the period.

OVERVIEW: Nasdaq reports its trading numbers every month, so analysts say there are rarely surprises in the stock exchange's quarterly results.

While the fourth quarter was rough for many financial services companies, the market turmoil led many investors and brokers to trade more.

Whether stocks rise or fall, the nation's biggest stock exchange by trading volume makes most of its money by charging fees for hosting trades. With investors unwinding positions and pouring money into safer sectors, trading volume was strong in the fourth quarter, though December was a little weaker than expected.

According to analysts, the focus of Nasdaq's report will be how it plans to integrate its acquisitions, such as the purchases of the Philadelphia Stock Exchange and the Boston Stock Exchange announced during the fourth quarter.

The most important deal on Nasdaq's plate is the acquisition of OMX, a group of Nordic exchanges. Nasdaq had trouble closing the deal itself, so it made a deal with Borse Dubai. Borse Dubai is buying OMX, and selling it to Nasdaq. Borse Dubai will get a 20 percent stake in Nasdaq.

The OMX deal followed Nasdaq's failed bid for the London Stock Exchange, which was Nasdaq's attempt to keep up with the New York Stock Exchange, which bought Euronext last year.

Exchanges of all types are buying one another to try and cut costs and offer a more diverse slate of products as trading becomes faster and more global. For example, earlier this month the New York Stock Exchange bought the American Stock Exchange, and Monday CME Group Inc. confirmed it is negotiating to buy Nymex Holdings Inc., which runs the New York Mercantile Exchange.

Nasdaq hosts nearly 30 percent of the 1.52 trillion shares that change hands each year in the U.S.

EXPECTATIONS: Analysts polled by Thomson Financial forecast profit of 47 cents per share on revenue of $210 million.

ANALYST TAKE: Thomas Weisel Partners David Grossman wrote in a client note he expects Nasdaq to report solid results for the fourth quarter because of the volatility-driven trading volume in the last three months of the year.

More important, though, is the company's outlook.

"Obviously the market will be most focused on any updated commentary relative to the outlook for the core business and the three acquisitions expected to close in the first quarter," he said.

Grossman said it is going to be tough to project results for the future because stock prices are currently volatile.

STOCK PERFORMANCE: Nasdaq's stock climbed 31 percent during the fourth quarter to close 2007 at $49.49.