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Bond issues help out at Moody's

City A.M. Reporter
MOODY&rsquo;S, parent of Moody&rsquo;s Investors Service, reported better-than-expected quarterly earnings yesterday on a pickup in bond issuance, and raised its outlook for the full year.<br /><br />Moody&rsquo;s, whose main business is providing ratings for debt, and its main rival McGraw-Hill&rsquo;s Standard &amp; Poor&rsquo;s, were hit hard by a slump in debt issuance during the recession, but a pickup in corporate financing activity in the third quarter boosted both companies&rsquo; results.<br /><br />Third-quarter revenue at Moody&rsquo;s climbed four per cent to $451.8m, while profit attributable to shareholders fell less than analysts had expected to $100.6m, or 42 cents per share, from $113m, or 46 cents per share, a year earlier.<br /><br />Revenue from rating corporate bonds soared 32 per cent from a year earlier, while revenue from rating structured finance fell 17 per cent.<br /><br />Citing the strength of the corporate debt market, New York-based Moody&rsquo;s raised its full-year profit forecast to a range of $1.60 to $1.68 a share. It previously forecast $1.45 to $1.55.<br /><br />&ldquo;This speaks to how significantly the credit market conditions have improved,&rdquo; said Peter Appert, analyst at Piper Jaffray, noting that in the past the company has tended to be conservative with its guidance.<br /><br />Standard &amp; Poor&rsquo;s on Monday reported its first quarterly increase in revenue in almost two years.