Deutsche Boerse Profit Falls as Trading Volume Declines

Deutsche Boerse AG (DB1), the German exchange blocked from buying NYSE Euronext by European regulators in February, reported first-quarter profit dropped 31 percent as trading volumes faltered.

Net income slipped to 146.2 million euros ($193 million) from 214.1 million euros in the first quarter of 2011, the Frankfurt-based exchange said in an e-mailed statement. Earnings before interest and taxes at Europe’s largest exchange by market value fell to 260 million euros from 319.1 million euros a year earlier. First-quarter sales revenue dropped 1.1 percent to 552.4 million euros.

NYSE Euronext, which reports earnings next week, and Deutsche Boerse are shifting back to expanding current operations after the European Commission blocked their deal. Deutsche Boerse agreed to buy its New York-based rival in a deal valued at $9.53 billion when it was announced in February 2011.

Nasdaq OMX Group Inc., the second-largest U.S. equity exchange operator, posted first-quarter earnings that missed analyst estimates yesterday amid lower trading revenue. CME Group Inc., the world’s biggest futures market, reported a 42 percent drop in profit from a year earlier today. Daily futures and options volume in the quarter declined 11 percent to average 12.3 million contracts.

Deutsche Boerse’s operating costs rose to 248.6 million euros, up from 211.8 million euros a year earlier, and included 16.6 million euros of exceptional costs related to the failed merger. The exchange also reported 6.3 million euros of one-off costs related to its “efficiency program” and job cuts.

‘Black Day’

On Feb. 1, European Union regulators vetoed a plan to create the world’s biggest exchange, after concluding that the merger would hurt competition. Deutsche Boerse called it “a black day for Europe and for its future competitiveness.”

After the NYSE Euronext deal was terminated, Deutsche Boerse said its Eurex futures exchange will move to a new trading system in the fourth quarter this year, the first step in its strategy for operating without NYSE Euronext. The platform is being developed internally and will be based on one already in use at the International Securities Exchange, the U.S.-based options market owned by Deutsche Boerse and Eurex.

To contact the reporter on this story: Nandini Sukumar in London at nsukumar@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.