Moody's Q3 Results Top Estimates, Reaffirms 2014 Outlook

(RTTNews) - Credit ratings agency Moody's Corp. (MCO) reported Friday a profit for the third quarter that increased 17 percent from last year, reflecting improved margins and double-digit revenue growth amid growth across both its operating segments.

Both adjusted earnings per share and quarterly revenues topped analysts' expectations. The company also reaffirmed earnings and revenue growth guidance for the full-year 2014.

"Moody's achieved strong financial results in the third quarter, with record revenue growth in Moody's Analytics, and double-digit revenue growth in nearly every line of business in both Moody's Investors Service and Moody's Analytics," President and CEO Raymond McDaniel said in a statement.

The New York-based company reported net income of $215.2 million or $1.00 per share for the third quarter, higher than $183.9 million or $0.83 per share in the prior-year quarter.

Excluding items, adjusted net income for the latest quarter was $0.97 per share. On average, eleven analysts polled by Thomson Reuters expected the company to report earnings of $0.90 per share for the quarter. Analysts' estimates typically exclude special items.

Revenue for the quarter increased 16 percent to $816.1 million from $705.5 million in the same quarter last year, and toped ten Wall Street analysts' consensus estimate of $787.18 million.

The company's U.S. revenue for the quarter grew 15 percent to $449.1 million, and revenue generated outside the U.S. rose 17 percent to $367.0 million from the year-ago quarter.

Total Moody's Investors Service or MIS global revenues increased 14 percent to $543.1 million from last year, with corporate finance revenue improving 12 percent, structured finance revenue increasing 22 percent, financial institutions revenue growing 16 percent as well as public, project and infrastructure finance revenue rising 7 percent.

Total global revenue for Moody's Analytics rose 20 percent to $273.0 million from the year-ago quarter, with research, data and analytics revenue increasing 10 percent, enterprise risk solutions revenue rising 26 percent, and professional services revenue surging 54 percent, primarily reflecting the December 2013 acquisition of Amba Investment Services.

Operating income for the quarter improved 20 percent to $349.7 million, and operating margin improved 160 basis points to 42.9 percent from last year's 41.3 percent. Operating expenses totaled $466.4 million, a 13 percent increase from the prior-year quarter.

The company noted that the Board of Directors declared on October 21 a regular quarterly dividend of $0.28 per share, payable on December 10 to stockholders of record at the close of business on November 20, 2014.

Looking ahead to fiscal 2014, the company continues to expect adjusted earnings in a range of $3.95 to $4.05 per share, on projected revenue growth in the low-double-digit percent range.

Street is currently looking for full-year 2014 earnings of $4.03 per share on annual revenue growth of 10.9 percent to $3.30 billion.

MCO closed Thursday's regular trading session at $94.55, down $0.69 or 5.49% on a volume of 1.25 million shares.