* Q4 EPS, minus items, 43 cents; consensus view 38 cents
* NYSE to cut stakes in LCH.Clearnet, MCX
* NYSE CEO cautiously optimistic retail investors returning
By John McCrank and Luke Jeffs
NEW YORK, LONDON Feb 5 (Reuters) - NYSE Euronext's focus on cutting costs amid a lackluster trading environment helped it beat profit expectations for the fourth quarter, and the exchange operator pledged to further reduce expenses as it prepares for its proposed sale to IntercontinentalExchange (ICE).
The Big Board parent said on Tuesday its net income for the quarter was $28 million, or 12 cents a diluted share, compared with $110 million, or 43 cents a share a year earlier.
Stripping out one-time items, such as costs related to the exchange operator's $8.2 billion takeover by ICE, the write-off of clearing investments and debt refinancing, net income was 43 cents a share. That was 5 cents above analysts' expectations, according to Thomson Reuters I/B/E/S.
Shares of NYSE were up 0.4 percent at $35.02 in New York in late morning trade.
The profit beat was mainly due to lower-than expected operating costs, which were down 6 percent at $392 million, Macquarie analyst Ed Ditmire said in a note to clients.
With trading volumes declining for three straight years, and nearly two-thirds of NYSE's total revenues linked to transaction and clearings fees, NYSE last year turned its attention to cost reductions, aiming to eliminate $250 million from expenses by 2014. In 2012, it cut $115 million in costs.
Looking forward, NYSE said it will shed its 5 percent stake in Mumbai-based commodities market MCX, which it said is valued in the mid-$60 million range. It also plans to unload as much of its stake in clearing house LCH.Clearnet, in which it had a 9.1 percent stake as of Dec. 31, as possible.
NYSE is also unwinding its BlueNext carbon-trading exchange, which was built in partnership with France's Caisse des Depots et Consignations.
Duncan Niederauer, NYSE's chief executive, was cautiously optimistic about the prospect for trading volumes in 2013, saying on a call with analysts that in January investors moved back into U.S. equity mutual funds at rates not seen in quite some time, as macro-economic concerns eased.
"While one month doesn't make a trend, we are hopeful that this is an indicator of the reemergence of the retail investor, and a resurgence of interest in the U.S. equity markets," he said.
The takeover of NYSE by ICE is expected to close in the second half of the year, creating a powerful transatlantic derivatives exchange and clearing house group.
NYSE, which operates European futures exchange Liffe, and ICE, which runs an energy market and aims to expand into interest rate futures, plan to hold their respective shareholder meetings in the early spring to vote on the deal, Niederauer said.
NYSE's net revenue for the fourth quarter fell 11 percent to $562 million as equities and derivatives trading volumes fell to multi-year lows. Revenue was still above analysts' expectations of $555.3 million.
Alex Kramm, an analyst at UBS, said that while NYSE's transaction-related businesses were in line with his forecasts, software and technology revenues were stronger than expected.
Cash trading and listing revenue was down 10 percent at $282 million. Data and systems revenue fell 6 percent to $120 million and futures trading was off 14 percent at $160 million.