NYSE Euronext profit triples amid higher volumes, cost cuts

NYSE Euronext said Tuesday that its first-quarter profit more than tripled as its European business surged and as the trans-Atlantic stock exchange operator continued to cut costs.

The company, which was formed last year by the combination of NYSE Group Inc. and Euronext NV, credited the addition of Euronext's activities and higher trading volumes with boosting the quarter's results.

The company said its earnings for the three months ended March 31 jumped to $230 million, or 87 cents per share, from $68 million, or 43 cents a share, a year earlier.

The 2007 figure did not include the results of Euronext, operator of the Paris, Amsterdam, Lisbon and Brussels exchanges, which combined with NYSE in April 2007 amid a wave of consolidations among exchange operators.

The company said that assuming the companies had been combined as far back as the year-ago quarter and excluding merger costs, its earnings rose 53 percent to $241 million, or 91 cents a share, from $158 million, or 60 cents a share, a year earlier.

Analysts, who typically exclude one-time costs and gains, were expecting the company to earn 83 cents a share, according to Thomson Financial.

NYSE Euronext's first-quarter revenue rose to $1.29 billion from $702 million a year earlier.

The company reduced technology infrastructure costs by $70 million during the quarter _ beyond the $50 million it had targeted _ and said it remains on track to meet its goal of cutting tech costs by $250 million for the year.

Market volatility helped boost trading revenue in both the U.S. and Europe during the period. Both markets posted new records for daily average trading volume.

Strong growth in derivatives trading helped boost results from Europe as well. Volume on the company's Liffe trading platform jumped 29 percent from a year earlier. And the company's NYSE Arca Options business saw volume surge 70 percent during the period.

The rise in electronic trading has brought increased competition among the world's exchanges. During the first quarter NYSE Euronext announced plans to acquire its longtime rival the American Stock Exchange.

NYSE Euronext chief executive Duncan Niederauer said during a conference call reviewing the quarter that while some of the Amex trading will move to an unoccupied trading floor at the New York Stock Exchange, further consolidation of the NYSE's stock-trading operations is possible.

"I certainly could see consolidation from two rooms to one," he said, referring to the NYSE's primary stock-trading operation.

But despite the rising role of technology in making trading faster and cheaper he said there could be an increase in staff on the trading floor by next year as NYSE Euronext folds in the Amex operations and adds space for options trading.

"We're not about to turn this into a remote business," Niederauer said.

David Easthope, a senior analyst at the financial research and consulting firm Celent, contends that the rise in electronic trading helped nearly all of NYSE Euronext's businesses. He also credited cost-cutting efforts.

"For a long time, the former NYSE acted more like a user-owned utility, but as an enormous public company, NYSE Euronext is focused on delivering continued growth and especially cost cutting through aggressive slashing of IT expenses, including headcount, and trading platform consolidation," he wrote in a note on the quarter's results Tuesday.

NYSE Euronext shares rose $4.88, or 7.2 percent, to $72.95 Tuesday.

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AP Business Writer Emma Vandore in Paris contributed to this story.