Moody's Corp.'s (MCO) second-quarter profit fell 19% as the
credit ratings and research agency reported lower revenue amid
limited new issuance for U.S. structured-finance products
But the company's results topped Wall Street's expectations,
leading it to raise its full-year earnings target by 5 cents to
$1.45 to $1.55. Moody's affirmed its revenue target.
Chairman and Chief Executive Raymond McDaniel said the latest
results "reflect some improvement in credit market activity,"
Moody's and its rivals have come under criticism for their role
in the financial crisis, especially over top ratings that were
assigned to mortgage-backed securities that later caused massive
losses for financial institutions. Last week, the Treasury
Department unveiled details of an Obama administration plan to
require increased disclosure and stronger oversight.
The company reported earnings of $109.3 million, or 46 cents a
share, down from $135.2 million, or 54 cents a share, a year
earlier. Both periods included a net 3 cents in gains. Revenue
dropped 7.6% to $450.7 million.
Analysts polled by Thomson Reuters expected per-share earnings
of 40 cents on revenue of $427 million.
U.S. and international revenue each declined 13%. International
revenue accounted for 47% of Moody's total revenue, up from 46% a
year earlier.
Ratings revenue fell 13% amid a 35% decline in global
structured-finance revenue. U.S. structured-finance revenue slid
33%, driven by limited new issuance.
Shares closed at $27.62 on Tuesday and were inactive in
premarket trading. The stock is up about a third this year.
-By John Kell, Dow Jones Newswires; 212-416-2480;
john.kell@dowjones.com
