NYSE Euronext profits fall amid trading slump

THE OWNER of the New York Stock Exchange yesterday announced that net income fell by 42 per cent to $108m (£67.6m) in the third quarter, despite continued efforts to cut costs.

NYSE Euronext has been hit by substantial declines in derivatives activity in its key New York, London and Paris markets.

Equity trading volume in New York dropped by 39 per cent to 1.6bn shares a day in the three months between July and September. European business slipped by a third to a daily average of 1.3m transactions.

Chief executive Duncan L Niederauer said the firm continued to “deliver on our multi-year growth commitments” and was on-track to “drive a step-up in the underlying earnings power of the company in the coming years, even if trading volumes remain lacklustre”.

In common with the rival London Stock Exchange, NYSE Euronext is investing heavily in ancillary post-trade services.

Clearing houses are particularly attractive for exchanges as rule changes are forcing more derivatives to be traded on electronic platforms and make greater use of the service.

In the meantime NYSE Euronext was able to announce that it has taken $82m out of its expense base so far in 2012, beating its target of $62.5m. Overall the company hopes to cut costs of $250m by 2014.

Net revenue fell by a fifth to $559m for the third quarter, while net debt increased to $2.1bn.

Shares in the firm closed down 4.6 per cent at €18.80 in Paris.