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 million coming at the end of 2010 and that's slightly smaller rollout in 2010 than we had expected," mostly due to the closing of the AEMS transaction and certain data center construction issues, co-COO Lawrence Leibowitz said during the call.

Investors weren't happy with the news. Shares dropped $9.93 to $72.80 on Tuesday.

"I believe management let the timetable for cutting costs slip," said one individual investor in an email, who is long NYSE shares. "Basically, NYSE Euronext is not doing what it said it would do, operationally. This is one reason the stock is getting hammered."

The deal with Euronext created the first transatlantic exchange titan. NYSE Euronext now encompasses six cash equities exchanges in five countries and six derivatives exchanges in six countries.

But integrating Euronext has not stopped NYSE from penetrating further into the exchange world. Last month it said it plans to acquire neighboring rival the American Stock Exchange for $260 million in stock. The Amex specializes in equities for smaller companies, as well as respectable options and exchange-traded fund businesses. It is one of the few exchanges that had yet to become a public company.

NYSE Euronext has also done several recent technology deals.

"The story here at the NYSE has become very much one of expense reductions," says Roger Freeman, an analyst at Lehman Brothers. "Investors are looking for evidence that merger synergies are coming through." Freeman has a buy rating on NYSE; Lehman is an adviser to NYSE on its acquisition of the American Stock Exchange.

Still Freeman says the selloff in the stock is overdone.

The fact that NYSE pushed out the synergies on the Euronext merger is a "slight negative ... certainly not one that justifies a ... selloff," he says. " It suggests that the full extent of the costs savings weren't priced into the shares to begin with."

"I think there has been some lingering doubts of the ability for NYSE to achieve the $250 million in technology cost savings," he adds, but after today's earnings conference call "our confidence has increased that they'll get there. They're being realistic with the timing."

Despite merger integration concerns, NYSE's fourth-quarter and full-year profit soared on record trading volume due to the volatile market as well as trading and listing benefits from the combination of the two exchanges.

The company posted profit of $156 million, or 59 cents a share, in the fourth quarter compared to $45 million, or 29 cents a share, a year earlier. Income excluding merger expenses, exit costs and other nonrecurring items rose 39% to $175 million, or 66 cents a share, meeting analysts' earnings expectations. Total revenue jumped 80% to $1.18 billion in the quarter.

For the full year, the company made $643 million, or $2.70 a share, compared to $205 million, or $1.36 a share, in the year-earlier period.

In the U.S. cash equity markets, NYSE had record transaction volume last year -- on average, 2.6 billion shares traded hands daily -- due to the turbulent market activity as the credit crunch intensified. The exchange said that seven of its top 10 all-time daily highs occurred in 2007, including its highest ever of 5.8 billion shares traded on Aug. 16. Overall, average daily trading volume on the Big Board and its smaller exchange NYSE Arca rose 16% year over year.

NYSE Euronext added 428 new listings last year. Proceeds from IPOs on the group's exchanges totaled $80 billion for the year.

The fourth quarter also marked a change in top management at NYSE Euronext. Duncan Niederauer took over as CEO in November, after previous chief John Thain took the top job at Merrill Lynch ( MER). NYSE's former CFO Nelson Chai also moved to Merrill in the same role during the quarter.

The surge in trading continued in January. In a separate release, the exchange operator said that its European cash markets traded approximately 41.5 million transactions, while the U.S. cash equities business had a record average daily trading volume of 3.9 billion shares handled on the Big Board and NYSE Arca.

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