Weak trading and cut-throat competition combined to squeeze the Nasdaq Stock Market's first quarter earnings.

Even so, the market, which hopes to sell itself to the public this year, managed to turn a profit, reversing a prior-quarter loss. But compared with a year ago, net income for the quarter fell 18.7% to $21.3 million, or 19 cents a share, while revenues slipped 5.2% to $211.3 million.

The latest quarter also reflected continued investment in its new Supermontage trading platform, Nasdaq's answer to the independent exchanges ? so called electronic communications networks, or ECNs ? that have been encroaching its turf. Despite the costs of SuperMontage, the company cut expenses to $172.6 million in the first quarter, versus $180.7 million in the year-ago quarter. The exchange's net income margin for the quarter was 10.1%.

"In the first quarter, we continued to narrow our focus to the objectives that will assure Nasdaq's leadership as we become an independent, shareholder owned company," said chairman and chief executive officer Wick Simmons in a statement.

The company said "economic and competitive factors" contributed to a 5.5% decline in transaction services revenue for the quarter to $104.7 million. Nasdaq and the electronic exchanges like Island and

Instinet

(INET)

have been engaged in a fierce price war since the end of last year.

Some ECNs have also begun posting their trades of Nasdaq stocks to regional exchanges rather than to the Nasdaq platform, hurting the company's market information services business. Market information services fell 17.7% to $52 million, the company said, "due to poor market conditions, as well as the reporting of trades to regional exchanges."

Revenue from corporate client group services actually rose in the first quarter, up 14.6% to $43.9 million, due to fee increases to listed companies implemented early this year. Other revenue, related to the licensing of the QQQ, an exchange traded fund that tracks the 100 largest financial stocks traded on the Nasdaq, was flat versus the year-ago quarter at $10.7 million.