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Nasdaq OMX Group Beats on EPS But GAAP Results Lag

By Seth Jayson – Updated Apr 10, 2017 at 1:44PM

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Just the facts, Fool.

Nasdaq OMX Group (Nasdaq: NDAQ) reported earnings on April 24. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), Nasdaq OMX Group met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue grew slightly. Non-GAAP earnings per share grew. GAAP earnings per share shrank significantly.

Gross margins grew, operating margins contracted, net margins contracted.

Revenue details
Nasdaq OMX Group reported revenue of $418.0 million. The nine analysts polled by S&P Capital IQ looked for revenue of $419.5 million on the same basis. GAAP reported sales were 7.1% lower than the prior-year quarter's $801.0 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.64. The 13 earnings estimates compiled by S&P Capital IQ predicted $0.62 per share. Non-GAAP EPS of $0.64 for Q1 were 4.9% higher than the prior-year quarter's $0.61 per share. GAAP EPS of $0.25 for Q1 were 48% lower than the prior-year quarter's $0.48 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 56.2%, 490 basis points better than the prior-year quarter. Operating margin was 15.3%, 850 basis points worse than the prior-year quarter. Net margin was 5.6%, 500 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $431.9 million. On the bottom line, the average EPS estimate is $0.67.

Next year's average estimate for revenue is $1.82 billion. The average EPS estimate is $2.67.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 583 members out of 605 rating the stock outperform, and 22 members rating it underperform. Among 159 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 156 give Nasdaq OMX Group a green thumbs-up, and three give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Nasdaq OMX Group is outperform, with an average price target of $31.57.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Stocks Mentioned

Nasdaq Stock Quote
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NDAQ
$68.49 (0.34%) $0.23

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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