Exchange operator Nasdaq OMX Group Inc. said Friday its third-quarter profit surged 68 percent as it slashed rebates and fees.
The share of U.S. stock trades it handles edged up from a year ago but was slightly lower than in the second quarter. Older exchanges like Nasdaq OMX Group and NYSE Euronext have seen the share of trades they execute diminish in recent years because of newer competitors entering the market.
Nasdaq OMX Group's share of U.S. stock trades rose to 22.3 percent during the most recent quarter from 22.1 percent a year earlier. It handled 22.8 percent of trades during the second quarter.
As recently as two years ago, Nasdaq OMX Group's market share for U.S. stock trading was around 30 percent.
Because of the dip in U.S. volume, Nasdaq OMX has been aggressive expanding its operations in recent years to generate new revenue. The company handled the largest share of U.S. stock options trading during the third quarter, with its two options exchanges handling a combined 28.8 percent of all trades. Its European stock trading volume jumped 39 percent during the third quarter.
Nasdaq OMX Group reported net income of $101 million, or 50 cents per share, for the three months ended Sept. 30, up from $60 million, or 28 cents per share, a year ago.
Analysts polled by Thomson Reuters forecast Nasdaq OMX Group would earn 46 cents per share on revenue of $369.9 million.
Nasdaq OMX Group's revenue, which excludes rebates, brokerage, clearance and exchange fees, rose to $372 million from $349 million a year earlier.
Market service revenues fell 9 percent as overall trading volume slowed because investors were more cautious about the health of the economy. Nasdaq OMX Group was more than able to make up for that drop in revenue by slashing rebate and fee costs by 18 percent.
Its shares rose 42 cents, or 2 percent, to $21.32 in morning trading.