Nyse Euronext, which today reported a doubling in first quarter profits on heavy cost cutting and increased trading volume, is planning to expand its derivatives business and decrease its reliance on equity trading.
Net income for the three months ending 31 March rose to $67.6 million, or 43 cents a share, from $30.3 million, or 24 cents, in the equivalent period last year.
The results exclude figures from Euronext, the pan-European exchange acquired by Nyse in early April, but include $11.1 million in merger expenses related to that deal and the earlier takeover of Archipelago, plus exit costs of $6.5 million from shutting down one of its five New York trading floors.
The closure of the trading floor and staff cuts marked the start of an agressive move by the Exchange to trim the fat on its operations. The group says plans to share technology across its combined operations will save approximately $250 million annually by 2009.
In an interview with the FT, Nyse chief John Thain did not rule out another big deal, possibly with a US derivatives exchange; fuelling speculation that the Big Board may yet make a play for the Chicago Board of Trade.
He also dismissed recent comments by a Glodman Sachs analyst that the introduction of new trading rules in US equities would see the Exchange lose further market share to rival Nasdaq. The comments, first reported Monday, knocked five per cent off the Exchange's market value.