By Simon Miller

NYSE Euronext has reported worst Q1 profits than expected due to depressed trading volumes and the cost of the failed Deutsche Boerse merger, the exchange announced today.

Profits were down 32 percent to $121m (£74.4m) as revenue fell 17% to $952m in the first quarter with derivatives particulary hit. Net revenues, excluding transaction-based expenses, dropped 11% to $601m.

Its derivative division saw a 25.4% drop in revenues as global average volumes fell 17% to 7.6m contracts with its London-base Liffe dropping 28%helping drag derivatives revenue down to $176m. However, March saw substantially stronger trading activity on Liffe than in the first two months.

Cash trading & listings revenues also dropped 7.3% hurt mainly by a 12% drop in European cash ADV and a 23% decline in US cash trading ADV.

Share trading and listings was down 7% to $304m while NYSE's smaller technology and data business was up 4% to $121m for the quarter.

The exchange said that it had incurred $31m of merger and exit costs including $16m from the ditching of the $7.4bn merger between NYSE Euronext and Deutsche Boerse after European antitrust authorities rejected the deal.

NYSE Euronext CEO Duncan Niederauer said that the results reflected a challenging environment that carried over to 2012 and would result in continuing headwinds.

He added: "Looking ahead into 2013 and 2014, we are focused on creating value by enhancing the underlying earnings power of the Company and solidly executing on the three core pillars of our earnings growth strategy: capturing growth opportunities in new markets and leveraging inter-asset class opportunities; delivering efficiencies through disciplined cost management and optimising our shared services infrastructure; and strategically deploying our capital."

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