As the company continues to discuss merger possibilities with the Chicago Mercantile Exchange (CME), Nymex Holdings, parent company of the New York Mercantile Exchange Inc. (Nymex), on Friday reported record 4Q2007 and full-year 2007 revenues.

Nymex reported record total operating revenues for full-year 2007 of $673.6 million, a 35% increase from $497.2 million for 2006. Net income for the year rose 45% to $224 million versus $154.8 million in 2006. Excluding a one-time charge related to Optionable Inc. in the second quarter of 2007, net income increased 54% to $238.8 million for the full year.

Total operating revenues for 4Q2007 rose 38% to a record $172.6 million compared to $124.8 million for 4Q2006. Net income for 4Q2007 increased 50% to a record $63.5 million compared to $42.3 million for 4Q2006. Diluted earnings per share (EPS) for 4Q2007 were 67 cents, based on 94.9 million shares outstanding, compared to 48 cents, for 4Q2006 based on 87.6 million shares outstanding.

Diluted EPS for full-year 2007 was $2.36 versus $1.90 in 2006, based on 94.9 million and 81.5 million shares outstanding, respectively. Excluding the one-time charge, diluted EPS for the full year was $2.52.

Nymex said its expansion into international markets helped boost the company’s 4Q and full-year results. “We delivered a strong year of operating performance and profitability as we continued to execute on our strategic goals,” said Nymex Chairman Richard Schaeffer. “Throughout the year we delivered dramatic volume growth through the successful adoption of electronic trading of our markets while also expanding into new markets and establishing important alliances, such as the launch of our leading Dubai Mercantile Exchange (DME) joint venture in June. Our recent purchase of a 15% stake in Imarex ASA, a leading Norwegian freight derivatives exchange, represents an important expansion into the substantial European derivatives market.

“In addition, we are proud of our leadership in creating The Green Exchange venture, which we expect will become the primary exchange for environmental markets contracts. We remain focused on expanding our distribution internationally, developing innovative product offerings and new ventures, and continuing to deliver profitable growth to shareholders.”

During the quarter and the year, Nymex also continued to watch the migration from floor trading to electronic trading. Average daily volume for 2007 was 1.485 million contracts, a 25% increase over 2006. Nymex electronic trading volume on CME Globex averaged 649,552 contracts per day, which represented a 234% increase over 2006 electronic trading volume. Nymex floor-traded energy futures and options averaged 260,160 contracts a day in 2007.

During 4Q2007, average daily volume was 1.539 million contracts, a 28% increase over the fourth quarter 2006. Nymex electronic trading volume on CME Globex averaged 703,673 contracts per day and represented a 91% increase over fourth quarter 2006 electronic trading volume. Nymex floor-traded energy futures and options averaged 228,678 contracts a day for 4Q2007 versus 362,259 contracts per day for the same period of 2006.

“We improved profitability in 2007 through our expense reduction program and achieved a record 71% pre-tax margin for the fourth quarter and 65% pre-tax margin for the year,” said Nymex CEO James E. Newsome. “Nymex continued to set multiple single-day electronic trading volume records on the CME Globex electronic trading platform, as well as numerous volume and open interest records in our benchmark contracts. Our product innovation continues to lead the industry with the listing of electronic options on futures, carbon emissions, uranium, catastrophe risk futures, and the growing Oman Sour Crude contract, which now dominates Middle Eastern crude oil volume and open interest.”

Earlier in the week, Nymex announced that it is in talks to be acquired by the CME Group, owner of the Chicago Mercantile Exchange, in what would be an $11 billion cash and stock deal (see Daily GPI, Jan. 29). The companies entered a 30-day exclusive negotiating period, and Nymex executives refused to comment on the talks during the company’s earnings conference call.

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