NYSE Euronext's CEO Discusses Q1 2012 Results - Earnings Call Transcript

NYSE Euronext (NYX)

Q1 2012 Earnings Call

April 30, 2012 8:00 am ET

Executives

Stephen Davidson - Vice President of Investor Relations

Duncan L. Niederauer - Chief Executive Officer and Director

Michael Geltzeiler - Chief Financial Officer and Group Executive Vice President

Analysts

Howard Chen - Crédit Suisse AG, Research Division

Niamh Alexander - Keefe, Bruyette, & Woods, Inc., Research Division

Richard H. Repetto - Sandler O'Neill + Partners, L.P., Research Division

Roger A. Freeman - Barclays Capital, Research Division

Brian Bedell - ISI Group Inc., Research Division

Alex Kramm - UBS Investment Bank, Research Division

Presentation

Operator

Good day, ladies and gentlemen, and thank you. And welcome to the First Quarter 2012 NYSE Euronext Earnings Conference Call. My name is Chanel, and I'll be your operator today. [Operator Instructions] I would now like to turn the call over to Stephen Davidson, Head of Investor Relations at NYSE Euronext. Please go ahead, sir.

Stephen Davidson

Thanks, Chanel. Good morning, and welcome to the NYSE Euronext First Quarter 2012 Earnings Conference Call. Before I introduce today's speakers, let me remind you that comments on the call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These statements are based on NYSE Euronext's current expectations and involve risk and uncertainties that could cause NYSE Euronext's actual results to differ materially from those in the statements.

These forward-looking statements speak as of today, and you should not rely on them as representing our views in the future. Please refer to our SEC filings for a full discussion of the risk factors that may affect any forward-looking statements. Except for any obligation to disclose material information under the federal securities laws, NYSE Euronext undertakes no obligation to release publicly any revisions to any forward-looking statements to reflect events or circumstances after this conference call.

We will discuss non-GAAP financial measures during this call. These non-GAAP measures are fully reconciled in the tables attached to the text of the earnings press release that we issued earlier today. We believe that these tables provide investors useful information about our business trends. However, our non-GAAP measures do not replace and are not superior to GAAP measures.

Duncan Niederauer, Chief Executive Officer, will do the highlights for the quarter, update you on the macro environment and our new initiatives, and then close by highlighting the momentum we are seeing in listings and the progress we have made on Project 14. Michael Geltzeiler, Chief Financial Officer, will then review the financial results for the quarter. We will then open the line for your questions. We are incorporating slides for the call today, which are available for viewing on our website, and Duncan and Mike will refer to the slides during their remarks.

With that, let me turn it over to Duncan.

Duncan L. Niederauer

Thanks, Stephen. Good morning, everybody. Thanks for joining the call today. Just to preview it a bit to start out. Given that we did our Investor Day at the beginning of April, and then we just had the Annual Shareholder Meeting just a few days ago, I think since we've communicated so much recently, I think we can tell by the attendance on the call today, it's a little lighter than usual as well. We're going to keep our prepared remarks shorter than we normally do, figuring there's not a lot of new news in here. We'll leave the usual time that we leave for questions and then our expectation would be we'd have everybody kind of back to work by about 8:45 or so.

From our point of view, the story of the first quarter is what we've done already and what we're continuing to do to set the table for growth. So that when the challenging market conditions we now face revert to what we believe are more historical norms, we are positioned to not only capture the revenue that comes with that recovery, but to enhance our overall performance with new streams of revenues in a lower cost and reduced share count environment, which will magnify the operating leverage of the model.

We're doing this by executing our plans through Project 14 as we discussed at the Investor Day in early April. The actions that we are taking with this comprehensive initiative will drive a step-up in the underlying earnings power of the company, which we believe will become evident in a more normal environment in 2013 and 2014.

So with that as a backdrop, let's turn to Slide 3. For the quarter, we recorded earnings per share of $0.47 per share on net revenue of $601 million, down from $0.68 per share on $679 million in the prior-year period. Cost discipline, a hallmark of our team, continued in the quarter with cost down 3% year-over-year on a constant dollar and constant portfolio basis. We were #1 in listings globally for the fifth consecutive quarter, and our share of technology IPOs in the U.S. year-to-date is approximately 60%.

In summary, we knew and expected this would be a challenging quarter for us given the difficult environment. We are seeing modest improvement in economic indicators around the world, which would generally bode well for our business. But unfortunately, we are still waiting for signs that trading volumes will return to the levels we have witnessed in 2010 and 2011.

Please turn to Slide 4. This is a slide that we've used in other meetings; I think at the Investor Day as well. And it tries to depict the various crosswinds in the economic environment and the macro environment in which we're operating our business. With a focus on what we can control and a solid execution of our strategy, we are optimistic that we can navigate through these in a way that will actually provide us with some opportunities.

Read the rest of this transcript for free on seekingalpha.com

More from Stocks

9 Stocks Goldman Sachs Thinks Will Blow Wall Street's Performance Away in 2019

9 Stocks Goldman Sachs Thinks Will Blow Wall Street's Performance Away in 2019

Trump, China Trade, Target and Las Vegas Casinos - 5 Things You Must Know

Trump, China Trade, Target and Las Vegas Casinos - 5 Things You Must Know

Quick Read: 3 Things for Investors to Know Before Wednesday's Trading Session

Quick Read: 3 Things for Investors to Know Before Wednesday's Trading Session

Replay: Jim Cramer on the Markets, Oil, General Electric, Zillow and Micron

Replay: Jim Cramer on the Markets, Oil, General Electric, Zillow and Micron

Pegasystems Founder Explains Why He Has One of the Hottest Tech Stocks Around

Pegasystems Founder Explains Why He Has One of the Hottest Tech Stocks Around