Nasdaq swung to a second-quarter profit Thursday, but sales fell 19% from a year ago due to pricing pressure and lower trading volume.

For its second quarter ended June 30, the operator of the Nasdaq Stock Market earned $4.8 million, or 2 cents a share. That reverses the year-ago continuing operations loss of $32 million, or 45 cents a share.

Revenue slipped to $120 million from $148 million a year earlier. The company also forecast a rise in incremental depreciation and amortization expense for the rest of the year as Nasdaq moves to lower-cost operations.

The company said the additional depreciation expense will amount to $16 million in 2004, on top of $22 million to $24 million of 2004 charges on real estate moves.

The company also said it is "moving forward with plans to offer new, more cost-efficient market access for participants." Nasdaq will discontinue support for Workstation and API connectivity via the Service Delivery Platform by the fourth quarter 2005. The move won't affect results.

"Nasdaq continues to implement our program to reduce our cost base, lowering direct expenses by over 25% from last year's second quarter," financial chief David Warren said. "Our ongoing objective is to right-size our operating and asset bases to match our revenue platform regardless of competitive environment, yet create a cost model that can profitably support revenue expansion."

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