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Nasdaq's Net Income Rises

The company offers a 2006 forecast that might miss estimates.
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Nasdaq Stock Market


said its fourth-quarter net income swelled year over year, and revenue surged in part because of the acquisition of the INET exchange.

Nasdaq, the New York-based electronic securities exchange, had earnings of $17.1 million, or 15 cents a share, in the fourth quarter, up from $7.4 million and 2 cents a share a year ago. The 2004 results include a gain of $9.6 million from discontinued operations. Nasdaq had a loss from continuing operations for last year's fourth quarter of $2.2 million, or 10 cents a share.

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Analysts surveyed by Thomson First Call were looking for a fourth-quarter profit of 13 cents. Revenue rose to $259.5 million for the quarter from $168.1 million in the same period a year earlier.

For 2006, Nasdaq expects to earn $57 million to $69 million, or roughly 52 cents to 60 cents a share, including the effect of charges associated with its cost-reduction program and the INET integration. The company said the charges will probably be $60 million to $70 million before taxes, or 28 cents to 32 cents a share.

Adding back the charges would imply an adjusted profit for the year of at most 92 cents a share, but Wall Street's consensus forecast is 99 cents.

Total expenses for 2006 are being targeted at $465 million to $475 million. Expenses for 2007 are expected to decline 20% to 25% from this year.

"2005 was a highly successful year for Nasdaq, both as a stock market and as a public company," said Chief Executive Robert Greifeld. "Our financial performance was exceptional, with strong fourth-quarter earnings growth from last year capping off a period of increased productivity. We continue to transform our organization by accelerating the pace of innovation in every aspect of our business, expanding our scale and functionality, and pioneering new products and services."

Shares of Nasdaq were sliding $3.25, or almost 7%, to $43.45 in the after-hours session. The stock had gained $3.15 in regular trading to close at $46.70.