UPDATE: Nasdaq CEO Touts Stock Trade As Profit Rises 70%

The top executive of Nasdaq OMX Group Inc. (NDAQ) said Wednesday that a 70% jump in first-quarter profits proved the strength of the share-trading business, which the exchange company is betting on as it seeks to jointly acquire NYSE Euronext (NYX).

Trading cash equities and options more efficiently has seen Nasdaq OMX outperform futures-focused peers like CME Group Inc. (CME) as well as more-diversified rivals like NYSE Euronext and Deutsche Boerse AG (DB1.XE), whose agreed merger Nasdaq aims to upend in partnership with IntercontinentalExchange Inc. (ICE), according to Nasdaq OMX CEO Bob Greifeld.

"The much maligned cash equities business over a long period of time is definitely outperforming the much vaunted derivatives business," said Greifeld in a conference call discussing first-quarter results.

Nasdaq is in the midst of a high-stakes takeover pursuit of NYSE Euronext. The takeover target had agreed to a buyout deal from Deutsche Boerse that would leave Nasdaq strategically vulnerable and has rejected a proposed deal from Nasdaq and IntercontinentalExchange. Tuesday, the Nasdaq-led team stepped up their offer with a breakup fee and committed financing.

Greifeld said Wednesday he remained committed to see through the joint proposal with ICE to acquire NYSE Euronext and that the companies still hoped to enter "friendly discussions" with the Big Board.

Shareholders, Greifeld said, will make the final decision on NYSE Euronext's future.

Nasdaq posted a profit of $104 million, or 57 cents a share, up from $61 million, or 28 cents a share, a year earlier. Excluding items such as charges from mergers and strategic initiatives in the latest quarter and debt repayment in the year-earlier period, earnings rose to 61 cents from 43 cents.

Revenue less liquidity rebates, brokerage, clearance and exchange fees jumped 15% to $415 million.

Analysts polled by Thomson Reuters most recently forecast earnings of 61 cents on $409 million in net revenue.

Nasdaq said its matched market share, or the amount of U.S. stock trading that went through its exchanges, slid to 19.2% from 23.9% a year earlier and 19.6% in the prior quarter.

Net exchange revenue at the company's market-services business--Nasdaq's biggest top-line contributor--jumped 17% from a year earlier to $281 million. Transaction-services revenue rose 26% to $195 million.

-By Jacob Bunge and Matt Jarzemsky, Dow Jones Newswires; 212-416-2240; matthew.jarzemsky@dowjones.com

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