Cost Savings Delays Hit NYSE
Updated from 9:54 a.m. EST
Cost savings from acquisition-heavy NYSE Euronext (NYX) could be tripping up the big exchange operator.
Shares of the parent of the New York Stock Exchange plummeted 12% Tuesday due in part to investors' concerns after the company pushed back the timeline for when it expects to realize the full amount of cost savings from its technology initiatives through combining the NYSE and Euronext platforms.
NYSE said at the time of the deal, completed last April, that it expected to recognize $100 million in "revenue synergies" and $275 million in cost savings -- $250 million from technology savings -- by the first quarter of 2010. But while discussing its fourth-quarter and full-year earnings results on Tuesday, the company extended that time period for the technology cost savings to the fourth quarter of 2010.NYSE blamed the pushback on a pre-existing Euronext joint venture with technology company Atos Origin called AtosEuronext Market Solutions, or AEMS. NYSE recently agreed to purchase the remaining 50% stake of the joint venture, which would give it ownership of certain Euronext cash and derivatives trading platform technology as well as third-party technology. The integration is expected to be completed in the third quarter, NYSE said. "Compared to our previous estimates, we're seeing that by the first quarter of 2010, we'll have a $200 million run-rate savings, with the full $250
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