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Nasdaq Posts Mixed Volumes, Revenues per Contract in Q4


Nasdaq, Inc. NDAQ has reported mixed volumes for fourth-quarter 2017. While U.S. equity options volume improved 12.1% year over year to 399 million contracts, revenues per contract were 14 cents and declined 18.8% on a year-over-year basis. Market share rose to 41.5% from 39.2% in the year-ago quarter

European options and futures volumes were 19.8 million contracts in the fourth quarter, down 6.6% year over year. Revenues per contract were 56 cents, up 21.7% on a year-over-year basis.

Under its cash equities, Nasdaq’s U.S. matched equity volume in the third quarter totaled 72.7 billion shares, down 4.8% from the prior-year quarter. While the European equity volume expanded 18.4% year over year to $238 billion. Again, the U.S. Fixed income volume in the third quarter contracted 26.3% year over year to $4 billion. While the European fixed income volume was 8.3 million contracts, up 40.7% year over year.

Nasdaq’s strategic initiatives have always accelerated growth. Improvement in non-transaction revenue base including market technology, listing and information revenues has been driving revenues. Management’s medium-term outlook calls for mid-single digit growth over the next three-five years. Strategic acquisitions have been helping the company diversify as well as add capabilities to its portfolio. The organization is also intensifying focus on Nasdaq Private Market Alternatives and the Nasdaq Ventures to ramp up growth over a longer term.

In the fourth quarter, there were 3,560 listed companies on Nasdaq compared with 3,469 in the year-ago quarter. Total listings grew 3.6% over the earlier-year quarter to 3,887.

Nasdaq’s shares have rallied 20% in a year, underperforming the 34.4% surge of the industry it belongs to. Nonetheless, the stock has seen the Zacks Consensus Estimate for current-year earnings being moved 1.6% north over the last 60 days. The company is set to report fourth-quarter 2017 earnings on Jan 31 before the market opens.

Our proven model shows that the company is likely to beat estimates this quarter per an ideal combination of the two strong ingredients: a Zacks Rank #3 (Hold), which increases the predictive power of ESP and an Earnings ESP of +0.83%, which makes us confident of a likely positive earnings surprise.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Concurrently, Nasdaq reported lower December 2017 volumes, reflecting a fall in trading activities. The U.S. equity options volume inched up 0.8% year over year to 122 million contracts. However, the European options and futures volume was 6.5 million contracts, down 7.1% year over year.

Recently, securities exchanges CME Group Inc. CME, Intercontinental Exchange, Inc. ICE and MarketAxess Holdings Ltd. MKTX have also reported volumes, respectively. While Intercontinental Exchange’s average daily volume increased 5% to 5.1 million contracts, MarketAxess has reported a trading volume of $104.4 billion for December 2017. CME Group’s ADV of 15.9 million contracts per day declined 2% year over year.

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