A $29.4 million gain on a currency options hedge against its failed bid for the London Stock Exchange helped US stockmarket operator Nasdaq report bumper profits for the fourth quarter of 2006.
Nasdaq reported a trebling of net income for Q4 2006 to $63 million from $17.1 million in the same period last year. Net income for the full year 2006 was $127.9 million, versus $61.7 million in 2005.
The $29.4 million options hedge contributed to almot half net profits for the quarter. The exchange was also boosted by a near-doubling in quarterly revenue from transaction and market data fees to $380.2 million.
Matched market share for Nyse-listed stocks was also significantly up on last year, growing to 14.2% in December 2006, up from 5.5% in December 2005.
Nasdaq chief Bob Greifeld comments: "We enter 2007 with a stronger core business that will support our new growth initiatives to increase revenue and profitability. We plan to achieve this by gaining market share and through new initiatives such as our planned options exchange and Portal market."
The loss of the LSE however continues to dent Nasdaq's stock price. The company's share tumbled $3.22, or nearly 10%, to $21.88 in afternoon trading. In total, the stock has lost 16% since the LSE takeover offer lapsed, wiping some $800 million off Nasdaq's market value.
Wall Street was also disappointed by weak forecasts for the year ahead, as Nasdaq promised earnings of between $180 million to $190 million, below consensus expectations.