The Nasdaq ( NDAQ) and Chicago Board of Trade ( BOT) both posted higher quarterly earnings Thursday, as trading remained brisk on their stock and derivatives exchanges. At the Nasdaq, the profit improvement was moderated by charges related to the acquisition of the London Stock Exchange and INET, but revenue nearly doubled because of acquisitions and higher trading volume. The stock exchange operator earned $16.6 million, or 13 cents a share, in the second quarter, up from $14 million, or 16 cents a share, a year ago. Total revenue was $411 million, up from $219.7 million. Analysts were expecting profits of 8 cents per share on revenue of $393.32 million. "Solid execution of our growth strategy throughout the organization drove Nasdaq's strong top-line performance," the company said. "Looking into the second half of 2006, we are maintaining our consistent focus on innovation and execution that anticipates and responds to the needs of our customers." The Nasdaq spent much of the second quarter buying up shares of the London Stock Exchange, a strategic move that occurred as rival NYSE Group ( NYX) appeared poised to acquire Euronext. The 25% LSE stake gives the Nasdaq a share of the London company's earnings that came out to $9.2 million in the most recent quarter. The Nasdaq also recorded an $8.2 million currency gain due to the share acquisitions in the second quarter; both items were offset by a $20.9 million charge related to the borrowings used to buy the shares. The company also had a $17.9 million charge related to the integration of the INET platform. The solid second-quarter earnings prompted the company to raise its full-year guidance. Nasdaq now sees net income of $68 million to $78 million for the year, which includes the impact of charges associated with a cost-reduction program, INET integration, and the LSE debt.
Meanwhile, the Chicago Board of Trade said earnings more than doubled in the second quarter, as fee increases and record trading volume helped the company lift revenue over 30%. The CBOT's net income was $43.5 million, or 82 cents a share, in the quarter, compared with $18.2 million, or 35 cents a share, a year ago. Revenue rose 31% to $158.5 million. Operating margin was 27% in the latest quarter compared with 15% a year ago. Analysts polled by Thomson Financial were expecting earnings of 73 cents per share based on revenue of $153 million. The company's two main metrics, average rate per contract and average daily volume, both improved in the second quarter. Average rate per contract was 56.4 cents, vs. 55.2 cents last quarter and 49.9 cents in the same quarter last year. Average daily volume increased to 3.3 million, vs. 3.1 million last quarter and 2.9 million in the same quarter last year. "This was a solid quarter for the CBOT, as we continued to realize volume growth across each of our product categories, advance our strategic initiatives aimed at creating new opportunities for our customers and extend our reach globally," the company said. "Furthermore, our second-quarter record financial results underscore the effectiveness of our business model as we significantly improved our profitability by scaling our operating platform and stringently controlling fixed costs."