Bond issues help out at Moody’s
MOODY’S, parent of Moody’s Investors Service, reported better-than-expected quarterly earnings yesterday on a pickup in bond issuance, and raised its outlook for the full year.
Moody’s, whose main business is providing ratings for debt, and its main rival McGraw-Hill’s Standard & Poor’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’ results.
Third-quarter revenue at Moody’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.
Revenue from rating corporate bonds soared 32 per cent from a year earlier, while revenue from rating structured finance fell 17 per cent.
Citing the strength of the corporate debt market, New York-based Moody’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.
“This speaks to how significantly the credit market conditions have improved,” said Peter Appert, analyst at Piper Jaffray, noting that in the past the company has tended to be conservative with its guidance.
Standard & Poor’s on Monday reported its first quarterly increase in revenue in almost two years.