NYSE Euronext posts $1.34 billion 4Q loss

Financial Crisis Posted on

Trans-Atlantic stock exchange operator NYSE Euronext said Monday it recorded a $1.34 billion loss during the fourth quarter as it was forced to take a charge related to its 2007 acquisition of European exchange Euronext.


NYSE Euronext lost $1.34 billion, or $5.06 per share, during the fourth quarter, after a profit of $156 million, or 59 cents per share, during the same quarter a year earlier.

The exchange operator would have recorded a profit had it not been for the $1.59 billion write-down on goodwill left over from the 2007 combination. The write-down was due to collapsing equity markets during the final three months of 2008 as the global economic crisis grew.

NYSE Euronext was formed in a $9.96 billion deal that saw Euronext — which operates the Paris, Amsterdam, Brussels and Lisbon exchanges — combine with the U.S. exchange in 2007.

Michael Geltzeiler, the company's chief financial officer, said the write-down brings the value of the company in line with the lower earnings multiples that analysts and investors are assigning for stock exchange operators. The lower multiples come as equity markets have tumbled amid the ongoing economic turmoil.

NYSE Euronext reviews goodwill values every year during the fourth quarter and believes the write-down during the last quarter is sufficient to match the company's expected future cash flow, Geltzeiler said in an interview.

Excluding the goodwill charge, as well as expenses as it closed its acquisition of the American Stock Exchange and other special items, earnings were $137 million, or 52 cents per share during the quarter ended Dec. 31.

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