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Nasdaq’s Q1 Volumes Improve, Revenues Per Contract Mixed


Nasdaq, Inc. NDAQ has reported improved volumes for first-quarter 2018. While U.S. equity options volume expanded 23.1% year over year to 474 million contracts, European options and futures volumes were 22.3 million contracts in the quarter, up 2.8% year over year.

However, revenues per contract for U.S. equity options declined by a penny to 15 cents, though the same for European options and futures increased 11.9% to 47 cents.

Under its cash equities, Nasdaq’s U.S. matched equity volume in the first quarter totaled 88.6 billion shares, up 18.6% from the prior-year quarter. While the European equity volume rose 26.2% year over year to $260 billion. Again, the U.S. Fixed income volume augmented 2.3% year over year to $5.2 billion. Whereas the European fixed income volume was 8.3 million contracts, up 15.3% 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 to five years.

Moreover, strategic acquisitions have been helping the company diversify as well as add capabilities to its portfolio. The organization is also intensifying its focus on Nasdaq Private Market Alternatives and the Nasdaq Ventures to ramp up growth over a longer term.

In the first quarter, there were 3,579 listed companies on Nasdaq compared with 3,489 in the year-ago quarter. Total listings grew 4.1% over the year-earlier quarter to 3,955.

Nasdaq’s shares have rallied 11% in a year, outperforming the industry's increase of 3.5%.

The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is pegged at $1.14, reflecting a 3.5% year-over-year climb on 8.2% higher revenues. The company is set to report first-quarter 2018 earnings on Apr 25 before the market opens.

Our proven model cannot conclusively state that the company is likely to beat estimates this quarter. This is because though the stock’s Zacks Rank #2 (Buy) increases the predictive power of ESP, its combination with an Earnings ESP of -5.43%, makes prediction difficult as a company needs positive ESP to be confident about an earnings surprise.

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

Concurrently, Nasdaq reported improved March volumes, highlighting strong trading activities. The U.S. equity options volume increased nearly 14% year over year to 155 million contracts. However, the European options and futures volume was 8.4 million contracts, up 3.7% year over year.

Recently, securities exchanges, namely MarketAxess Holdings Ltd. MKTX, CBOE Holdings Inc. CBOE and Intercontinental Exchange, Inc. ICE also posted respective monthly volumes. While MarketAxess has reported a trading volume of $152.3 billion, CBOE Global Markets’ ADV of 8.5 million contracts contracted about 18% year over year and Intercontinental Exchange’s volumes decreased 11.3% to 5.9 million contracts.

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