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Moody's profit jumps, company expects very good year

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Staff writer ▼ | February 8, 2013
Moody'sCredit rating agency Moody's Corp. may face a federal lawsuit but that didn't hurt revenues: operating income for the quarter increased 51%.

The company reported revenue of $754.2 million for the three months ended December 31, 2012, up 33% from $567.1 million for the fourth quarter of 2011. Operating expenses for Q4 2012 totaled $494.0 million, 25% higher than in the prior-year period, and included a non-tax deductible goodwill impairment charge of $12.2 million.

Operating income for the quarter was $260.2 million, a 51% increase from $172.1 million for the same period last year. Adjusted operating income for the quarter was $296.2 million, a 54% increase from $192.7 million last year. Diluted earnings per share of $0.70 for the fourth quarter of 2012 increased 63% from $0.43 in Q4 2011.

Raymond McDaniel"Moody's delivered strong financial performance throughout 2012, with double-digit revenue growth in most lines of business. Despite ongoing economic uncertainty, we anticipate generally favorable market conditions to remain in place in 2013. As a result, Moody's expects revenue growth across all areas of the business, as well as earnings per share in the range of $3.45 to $3.55.," said Raymond McDaniel, president and chief executive officer of Moody's.

Moody's Corporation revenue for full-year 2012 totaled $2,730.3 million, an increase of 20% from $2,280.7 million for 2011. Operating expenses for full-year 2012 totaled $1,652.9 million, 19% higher than a year ago. Operating income of $1,077.4 million increased 21% from $888.4 million in 2011. Adjusted operating income was $1,183.1 million for the year, 22% higher than 2011.

The operating margin was 39.5% for full-year 2012, up 50 basis points from full-year 2011's margin of 39.0 percent. Diluted earnings per share of $3.05 for full-year 2012 grew 22% from $2.49 in 2011 and included a legacy tax benefit of $0.06 in the third quarter of 2012. For Moody's overall, the company expects full-year 2013 revenue to grow in the high-single-digit percent range.

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