(Updates with planned sale and 3Q detail)
NYSE Euronext (NYX) announced plans Thursday to sell a minority
stake in its U.S. derivatives unit to a group of banks and traders
as the exchange operator reported a 28% fall in third-quarter
profit. The company said it would sell a "significant stake" in the
NYSE Liffe U.S. derivatives arm to a group including hedge-fund
trader Citadel Securities, Getco, UBS AG (UBS), Goldman Sachs Group
Inc. (GS) and Morgan Stanley (MS), though NYSE Euronext will retain
control and day-to-day management.
The planned sale is the latest example of what the company
called "remutalization" in the exchange sector designed to spur
trading amid profound changes in the regulatory landscape. It has
taken a similar path with its U.S. options arm.
The announcement was made alongside third-quarter earnings that
beat market expectations. Cost cuts helped mitigate a decline in
revenue attributed to sagging cash equity volume and pricing.
"We continue to see stabilization in our core businesses and
significant progress on our new initiatives," NYSE Euronext Chief
Executive Duncan Niederauer said in a statement.
Net profit in the third quarter dropped to $138 million, or 53
cents a share, from $192 million, or 72 cents, a year earlier on a
non-GAAP (generally accepted accounting principles) basis. On a
GAAP basis, latest-quarter net income was $125 million, or 48 cents
a share, compared with $174 million, or 66 cents, a year
earlier.
Net revenue fell nearly 14% from a year earlier to $624 million,
but was up from the previous quarter, driven by turnover from the
company's derivatives operations, its largest business segment.
Revenue from cash markets fell 46% from the year-ago period, almost
halving at its European business and sharply down in the U.S. amid
fierce price competition and weak volume.
The exchange owner's third-quarter GAAP results include the
impact from merger expenses and exit costs, the sale of Hugin Group
BV, the sale of a stake in Brazil's BM&F Bovespa and a fair
value adjustment to the stake in BIDS Holdings LP.
-By Geraldine Amiel, Dow Jones Newswires; +33 1 40171740;
geraldine.amiel@dowjones.com
(Doug Cameron contributed to this article)