By Phil Wahba

NEW YORK (Reuters) - Nasdaq OMX Group (NDAQ.O: Quote, Profile, Research) posted a sharp rise in first-quarter earnings on Thursday on higher trading volumes, and said it has started to reap the benefits of Nasdaq's acquisition of Nordic exchange OMX in February.

While Nasdaq OMX's net income surged to $121.4 million from $18.3 million in the 2007 first quarter, the results fell short of Wall Street expectations and the year-ago figures didn't include the OMX. The company's stock fell 1.2 percent.

Christopher Allen, a Banc of America securities analyst, said he had expected the stock sell-off because of a tougher trading environment so far this quarter, the stock's recent strength and lower-than-expected U.S. market service revenues.

He wrote in a research note that while Nasdaq OMX might be inexpensive, stocks with lower price-to-earnings ratios such as Deutsche Boerse (DB1Gn.DE: Quote, Profile, Research) may offer better value.

Excluding certain one-time gains and merger-related expenses, earnings were 48 cents per share, a penny below analysts' average forecast, according to Reuters Estimates.

The year-ago results reflect only Nasdaq's performance, while the latest figures include the Nordic exchange starting Feb. 27, when the acquisition was completed.

EXPANDING OVERSEAS

The OMX acquisition is a component of Nasdaq's plan to expand overseas and trade in new asset classes, in much the same way the NYSE Euronext (NYX.N: Quote, Profile, Research) merger has helped that bourse.