NYSE Euronext suffers $1.34-billion loss in fourth quarter

NEW YORK (AP) — Trans-Atlantic stock exchange operator NYSE Euronext said Monday it recorded a $1.34 billion loss during the fourth quarter as it was forced to take a charge related to its 2007 acquisition of European exchange Euronext.

NYSE Euronext lost $1.34 billion, or $5.06 per share, during the fourth quarter, after a profit of $156 million, or 59 cents per share, during the same quarter a year earlier.

The exchange operator would have recorded a profit had it not been for the $1.59 billion write-down on goodwill left over from the 2007 combination. The write-down was due to collapsing equity markets during the final three months of 2008 as the global economic crisis grew.

NYSE Euronext was formed in a $9.96 billion deal that saw Euronext – which operates the Paris, Amsterdam, Brussels and Lisbon exchanges – combine with the US exchange in 2007.

Excluding the goodwill charge, as well as expenses as it closed its acquisition of the America Stock Exchange and other special items, earnings were $137 million, or 52 cents per share during the quarter ended Dec. 31.

Analysts surveyed by Thomson Reuters, on average, forecast earnings of 56 cents per share for the quarter on revenue of $1.19 billion. Analysts estimates do not usually include special items such as the goodwill charge.

After falling short of analysts’ expectations, shares of NYSE Euronext fell $1.65, or 7.2 percent, to $21.19 in premarket trading. Shares closed Friday at $22.90.

NYSE Euronext’s revenue rose to $1.22 billion from $1.1 billion during the same quarter a year earlier. Pro forma revenue, which excludes certain fees and nonrecurring items such as impairment charges and acquisition expenses, rose 21 percent to $1.18 billion in the fourth quarter.

Citi Investment Research analyst Donald Fandetti said revenue was below his expectations as list fees, derivative revenue and market data were also short of expectations. Those weaker-than-expected results though were offset by higher regulatory fees.

NYSE Euronext expects derivatives pricing to remain stable in 2009, but pricing in US and European cash equities is expected to fall during the year.

Excluding the special charges, profitability still dwindled at NYSE Euronext because of increasing competition, which has reduced its market share.

NYSE’s matched volume of NYSE-listed stocks fell to 43 percent during the fourth quarter, from 54.3 percent during the year-ago period.