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Nasdaq Reports Mixed Volumes & Revenues Per Contract in Q3


Nasdaq, Inc. NDAQ recently reported mixed volumes for third-quarter 2018. While U.S. equity options volume increased 11.8% year over year to 407 million contracts, European options and futures volumes registered 18.1 million contracts, down 5.7% year over year.

Revenues per contract for U.S. equity options improved 7.1% year over year to 15 cents, although the same for European options and futures deceased 5.9% to 48 cents.

Under its cash equities, Nasdaq’s U.S. matched equity volume in the third quarter grossed 77.8 billion shares, up 12.6% from the prior-year quarter. European equity volume decreased 7.7% year over year to $204 billion. Again, U.S. fixed income volume traded contracted 19.6% year over year to $3.2 trillion. Whereas the European fixed income volume was 7.9 million contracts, down 16.2% year over year.

In the third quarter, there were 3,669 listed companies on Nasdaq compared with 3,525 in the year-ago period. Total listings grew 4.4% over the year-earlier quarter to 4,059.

Nasdaq has consistently pursued strategic initiatives to expedite its growth. Apart from subscription and revenues in trading business, the company is ramping up its non-transaction revenue base, which includes market technology, listing and information revenues. Management’s medium-term outlook calls for 8-11% growth. Moreover, strategic acquisitions have been helping the company diversify as well as add capabilities to its portfolio.

Shares of Nasdaq lost 6% during the third quarter of 2018, against the industry's increase of 1.4%.

The Zacks Consensus Estimate for third-quarter bottom line is pegged at $1.16, reflecting a 9.4% year-over-year rise on 0.5% higher revenues. The company is set to report third-quarter 2018 earnings on Oct 24 before the market opens.

Our proven model does not conclusively show that the company is likely to beat estimates in the to-be-reported quarter. This is because of the stock’s Zacks Rank #4 (Sell) that decreases the predictive power of ESP and an Earnings ESP of 0.00%.

Concurrently, Nasdaq reported mixed September volumes. U.S. equity options volume expanded 8.6% year over year to 126 million contracts. However, European options and futures volume was 6.6 million contracts, down 14.5% year over year.

Recently, securities exchanges such as CBOE Holdings Inc. CBOE, CME Group Inc. CME and MarketAxess Holdings Ltd. MKTX posted their monthly volumes. While CBOE Global Markets’ September ADV of 7.3 million contracts nudged up 3.1% year over year, CME Group’s ADV of 17.5 million contracts per day grew 3% year over year. MarketAxess has reported a trading volume of $136.6 billion for the month.

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

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