Nymex Volume and Income Jump

A 25% increase in volume and clearing fees propelled Nymex Holdings(NMX Quote) to a record fourth quarter for 2007, the company said Friday.

Net income for the quarter increased 50% to $63.5 million, vs. $42.3 million in 2006. The company earned 67 cents in diluted earnings per share for the fourth quarter of 2007, beating analyst's expectations by a penny according to Thomson Financial. These numbers are a dramatic jump over the 48 cents reported for the fourth quarter of 2006.

Average daily volume was 1.539 million contracts during the fourth quarter 2007, a 28% increase over the fourth quarter 2006. Nymex, operator of the New York Mercantile Exchange, offers commodity contracts and options on futures trades. It has been increasing its use of electronic trading, but also continues to combine that with outcry floor trading.

Clearing and transaction fees also proved to be lucrative with an increase of 38% to $144.9 million. This compares to $104.8 million for 2006. Market data fees also increased 50% $24.6 million vs. $16.4 million for the previous year.

"Throughout the year we delivered dramatic volume growth through the successful adoption of electronic trading of our markets, while also expanding into new markets and establishing important alliances, such as the launch of our leading Dubai Mercantile Exchange joint venture in June," Nymex Chairman Richard Schaeffer said.

Earlier this week, the company confirmed that it was in talks to be acquired by the CME Group (CME Quote). CME was formed last year in a merger between the Chicago Mercantile Exchange and the Chicago Board of Trade.

The merger talk comes as exchange markets continue to consolidate. NYSE Euronext (NYX Quote), operator of the New York Stock Exchange, announced last month its intention to purchase its smaller rival, the American Stock Exchange. This was preceded by Nasdaq Stock Exchange(NDAQ Quote) announcing its decision to acquire the Philadelphia Stock Exchange last summer.

InterContinentalExchange (ICE Quote), the main competitor to Nymex and CME, said Thursday that it intended to acquire privately held YellowJacket -- an electronic platform for over-the-counter trades that is a player in weather contracts. Intercontinental Exchange had launched a counterbid for the Chicago Board of Trade last year and has been trying to take market share from Nymex.

Undeterred, Nymex CEO James Newsome said the exchange "continued to set multiple single-day electronic trading volume records on the CME Globex electronic trading platform, as well as numerous volume and open interest records in our benchmark contracts."

Nymex shares were up 1% to $115.20 in premarket trading.