Moody's Q2 Results Top Estimates, Backs EPS View; Lifts Revenue Growth Forecast

(RTTNews) - Credit ratings agency Moody's Corp. (MCO) reported Friday higher profit in its second quarter, boosted by one-time gain as well as strong revenue growth in revenues. Adjusted earnings per share and top line beat market estimates. Further, the company backed its fiscal 2014 forecast for earnings, while lifted revenue growth view.

In pre-market activity, Moody's shares were gaining $1.52 or 1.64 percent, and trading at $94.

For the second quarter, net income attributable to the company increased to $319.2 million from the prior year's $225.5 million. Earnings per share improved 48 percent to $1.48 from $1.00 last year.

The latest results included a $103 million non-cash, pre-tax gain, or $0.36 per share, resulting from Moody's acquisition of a controlling interest in ICRA Ltd., an Indian credit rating agency.

Adjusted earnings per share, excluding the ICRA gain, was $1.12, compared to $1.00 in 2013. On average, 12 analysts polled by Thomson Reuters expected the company to report earnings of $1.02 per share for the quarter. Analysts' estimates typically exclude special items.

Quarterly revenue was $873.5 million, up 16 percent from $756 million in the prior year quarter. Wall Street analysts' revenue consensus was $803.35 million.

U.S. revenue of $461.1 million increased 13 percent and non-U.S. revenue of $412.4 million increased 19 percent from the prior year. Revenue generated outside the U.S. represented 47 percent of Moody's total revenue, same as last year.

Raymond McDaniel, president and chief executive officer, said, "Moody's achieved strong financial performance in the second quarter, with both Moody's Investors Service and Moody's Analytics delivering mid-teens percent revenue growth. Our results reflect healthy market conditions and good demand for a wide range of our products and services."

Looking ahead for fiscal 2014, Moody's continues to expect adjusted earnings per share in the range of $3.90 to $4.00, which excludes the $0.36 ICRA gain in the second quarter.

The company now expects full-year 2014 revenue to grow in the low-double-digit percent range, compared to previous estimate of high-single-digit percent revenue growth.

Wall Street currently is looking for fiscal year 2014 earnings of $3.98 per share on annual revenues of $3.21 billion.

Operating margin for the year is still projected to be 42 to 43 percent and adjusted operating margin for the year is still expected to be 45 to 46 percent.

The company continues to expect 2014 total share repurchases to be approximately $1 billion.

Separately, Moody's said its Board of Directors on July 14 declared a regular quarterly dividend of 28 cents per share. The dividend will be payable on September 10 to stockholders on record August 20, 2014.