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According to Market Intelligence, April 2023


Nasdaq reports loss in Q4'16 due to charges related to realignment

Nasdaq Inc. reported a net loss attributable to the company of $224 million, or $1.35 per share, in the fourth quarter of 2016, as it realigned its reporting segments and re-branded its fixed-income strategy.

The company said it is realigning its segment reporting to integrate the listing services and corporate solutions businesses into a single corporate services segment, and market technology is now reported as a separate reporting segment. The company is also repositioning its fixed income strategy, which will bring the company's U.S. and European fixed income products and services together under a single brand called Nasdaq Fixed Income led by John Shay.

In addition, the company will end its NLX interest rate futures business.

Nasdaq President and CEO Adena Friedman said in a news release that while the realignment impacted the company's quarterly results, the underlying performances across most businesses was strong during the quarter.

Non-GAAP net income attributable to the company was $161 million, or 95 cents per share, compared with $150 million, or 89 cents per share, in the fourth quarter of 2015.

Non-GAAP results exclude $646 million in pretax charges primarily related to the write-off of the eSpeed trade name following the rebranding of the U.S. Treasury business.

The S&P Capital IQ consensus normalized EPS estimate for the quarter was 94 cents.

Revenues less transaction-based expenses for the fourth quarter of 2016 was $599 million, compared with $536 million in the prior-year quarter, primarily driven by a $54 million positive impact from acquisitions. Organic growth in non-trading segments was 5% on a year-over-year basis.

Fourth-quarter 2016 operating expenses totaled $386 million, up from $290 million in the year-ago quarter. The increase primarily reflects incremental operating expenses from the acquisitions closed in 2016, an insurance recovery recorded in the fourth quarter of 2015 and increased merger and strategic initiative costs.

Non-GAAP operating expenses were $324 million in the fourth quarter of 2016, up from $285 million in the fourth quarter of 2015. The increase primarily reflects $29 million of incremental operating expenses from the acquisitions closed in 2016 as well as $14 million due to organic growth, partially offset by a $4 million favorable impact of changes in foreign exchange rates.

For 2016, the company posted net income attributable to the company of $108 million, or 64 cents per share, down from $428 million, or $2.50 per share, in the year-ago period.

Non-GAAP net income attributable to the company was $621 million, or $3.68 per share, compared with $581 million, or $3.39 per share, in 2015.

The S&P Capital IQ consensus normalized EPS estimate for the year was $3.67.

During 2016, the company repurchased 1.5 million shares for a total cost of $100 million.

For 2017, the company is initiating non-GAAP operating expense guidance of $1.26 billion to $1.31 billion.