The Nasdaq Stock Market Inc. today announced that it expects first quarter net income to be US$18.3 million, with the cost of its failed bid for the London Stock Exchange taking a bite out of its earnings.

Operating income is expected to be US$81.4 million and gross margin to be US$192.1 million. Expected to be included in first quarter results are US$24.9 million in acquisition related charges associated with Nasdaq’s offer for the London Stock Exchange. Nasdaq will release final first quarter 2007 results on April 19.

David Warren, Nasdaq’s chief financial officer commented, “We are extremely pleased with our first quarter operating results, especially with the increase in operating income. These results demonstrate our ability to successfully execute a plan to drive growth in our business.”

“Based on the lapse of our offer for the London Stock Exchange in February 2007, it was determined that previously discussed costs incurred as a result of our bid be expensed in the first quarter 2007. These expenses will have the impact of reducing diluted earnings per share by 10¢ per share for the quarter,” Warren explained.