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Nasdaq first-quarter profit surges on boost from OMX buyout

By TIM PARADIS | AP Business Writer

11:51 AM EDT, May 8, 2008

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NEW YORK - Nasdaq OMX Group said Thursday that its quarterly profit surged in its first combined reporting period that included Sweden's OMX stock exchange.

The exchange operator said Thursday that first-quarter earnings rose to $121.4 million, or 69 cents per share, from $18.3 million, or 14 cents a share, a year earlier.

Profits excluding one-time costs and benefits as well as buyout expenses for OMX AB rose to $85 million, or 48 cents a share. Had the companies been combined before their Feb. 27 tie-up, Nasdaq said it would have earned 54 cents a share, compared with 33 cents a share a year earlier.

Wall Street expected the company would earn 49 cents a share, according to analysts polled by Thomson Financial. Analyst predictions typically exclude one-time expenses and gains.

The company said revenue for the first three months of the year rose 30 percent to $918.2 million from the $709.1 million the companies would have earned had they been combined in both periods.

Efforts to combine the technology of Nasdaq and OMX are producing savings at a faster pace than forecast, the company said. By the fourth quarter, the company expects to have carved out $25 million to $35 million in annual cost savings, up from its earlier forecast of $20 million to $30 million.

"Our business continued to operate efficiently and effectively, punctuated by strong operating performance, successful integration efforts and our ongoing disciplined approach to managing our balance sheet," Chief Financial Officer David Warren said in a statement.

Nasdaq, which is in the process of acquiring stock exchanges in Boston and Philadelphia, said the OMX Nordic Exchange logged record volumes in trading of derivatives and stocks during the quarter.

The company also said it logged fresh highs in the trading of stocks listed on rival New York Stock Exchange, which is controlled by NYSE Euronext.

In March, Nasdaq announced its first major foray with OMX. The company said it plans to establish a trading platform for the most actively traded stocks in Europe. The system will allow cross-border trading of about 300 European blue chip stocks.

"Our opportunities for growth are the strongest they have been in my time as CEO," Chief Executive Robert Greifeld said in a conference call reviewing the quarter. He said the company expects to close both the Boston and Philadelphia transactions in the second quarter.

Nasdaq shares fell 33 cents to $39.29.