Nasdaq (NDAQ) Reports Mixed Volumes in Q1, Shares Rally

Nasdaq, Inc. NDAQ reported mixed volumes for first-quarter 2017. Nonetheless, shares gained 0.2% during the trading session, reflecting investor optimism over the company’s growth potential.

While U.S. equity options volume surged 72% year over year to 385 million contracts, revenue per contract was 15 cents, down by a penny on a year-over-year basis.  Market share jumped to 42.5% European options. Futures volume, however, decreased 21% year over year to 21.7 million contracts in the first quarter. Revenue per contract was 42 cents, up by a penny on a year-over-year basis.

Under its cash equities, Nasdaq’s U.S. matched equity volume in the reported month totaled 74.7 billion shares, down 20% from year-ago quarter. Further, European equity volume declined 4.6% year over year to $206 billion. Moreover, U.S. Fixed income volume in the first quarter decreased 16% year over year to $5 billion. Further, European fixed income volume was 7.2 million contracts, up 16% year over year.

In the first quarter, there were 3,468 listed companies on Nasdaq compared with 3,458 in the year-ago quarter. Total listings improved 2.7% over the year-ago quarter to 3,800.

Year to date, Nasdaq’s shares have gained 3.34%, underperforming the 6.02% increase for the Zacks categorized Securities Exchanges industry. Nonetheless, the stock has been witnessing upward revisions in estimates over the last seven days. The company is set to report first-quarter earnings on Apr 26, before the market opens. The Zacks Consensus Estimate is pegged at $1.06 on revenues of $599 million, translating to a year-over-year increase of 12.2% for the top line and 16% for the bottom line.

However, our proven model cannot conclusively state if the company will beat earnings because the company has a Zacks Rank #4 (Sell) and an Earnings ESP of -0.94%. As it is, we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.

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

Concurrently, the company reported improved Mar 2017 volumes, reflecting an increase in trading activities. U.S. equity options volume surged 81.3% year over year to 136 million contracts in March. The company’s European options and futures volume was 8.1 million contracts, up 2.5% year over year.

Under its cash equities, Nasdaq’s U.S. matched equity volume in the reported month totaled 28.8 billion shares, up 0.3% from the Mar 2016 level. Further, European equity volume grew 14% from the prior-year month to $73 billion. Moreover, U.S. fixed income volume in March jumped 5.9% year over year to $1.8 billion.

European fixed income volume was 2.8 million contracts for Mar 2017, up 27% from prior-year month. In addition, European energy clearing and trading totaled 222 Terawatt hours, down from 225 Terawatt hours in Mar 2016.

Recently, securities exchanges CME Group Inc. CME, Intercontinental Exchange, Inc. ICE and MarketAxess Holdings Ltd. MKTX also reported their respective March volumes. While CME Group’s average daily volume increased 18% to 16.9 million contracts per day, Intercontinental Exchange’s average daily volume climbed 30% to 6.7 million contracts. MarketAxess recorded a 32% increase in volumes, on a sequential basis, to $155.2 billion.
 

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