Nyse Euronext swings to loss on LCH.Clearnet payment; plans tech job cuts

Nyse Euronext swings to loss on LCH.Clearnet payment; plans tech job cuts

Nyse Euronext has swung to a net loss of $182 million for the second quarter - mainly due to a $355 million severance payment made to LCH.Clearnet - and warned of impending job cuts for technology staff.

The net loss of $182 million, or $0.70 per diluted share, compares to net income of $195 million for the same period the previous year. Excluding the one-time charges of $442 million, net income was $132 million, down from $199 million in Q2 2008. Gross revenue was up from $1.03 billion to $1.13 billion.

The exchange paid LCH.Clearnet $355 million after ripping up its contract with the clearer and setting up its own London operation, which launched today.

Despite paying the huge one-off charge, the exchanges CEO Duncan Niederauer, insists the move is worthwhile, predicting Nyse Liffe Clearing will generate revenues of over $100 million a year and be accretive in 2009.

The exchange has also taken a $87 million charge related to planned job cuts - 230 in Europe and 60 in the US.

"As a result of the European social plan, a new US VRIP and reduced technology staffing, headcount is expected to be significantly lower in the second half of 2009, compared to the first half of 2009," says the exchange.

The company says it expects to exceed its cost-saving target for the year, which was set at $100 million in 2009. Fixed costs were down to $398 million for the quarter from $425 million in Q2 2008.

Michael Geltzeiler, CFO, Nyse Euronext, says: "The positive impact from our ongoing technology and non-technology cost saving initiatives continued in the second quarter with fixed costs down 6% year-over-year."

Comments: (0)