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Moody’s Q2 Results 2012 Buoyed by Analytics

Moody’s reported revenue of $640.8 million for the three months ended June 30, 2012, up 6% from $605.2 million for the second quarter of 2011.  Operating income grew only by 3%.

Global revenue for Moody’s Investors Service (MIS) for the second quarter of 2012 was $441.2 million, about flat to the prior-year period.

Global revenue for Moody’s Analytics (MA) for the second quarter of 2012 was $199.6 million, up 19% from the second quarter of 2011.  Excluding the impact of foreign currency translation, revenue growth was 21 percent.

Year-to-Date Results: Revenue for the first six months of 2012 totaled $1,287.6 million, an increase of 9% from $1,182.3 million for the same period of 2011.  Excluding the impact of foreign currency translation, revenue growth was 11 percent. Expenses for the first six months of 2012 totaled $740.1 million, 12% higher than a year ago.  The impact of foreign currency translation was negligible.

First half operating income of $547.5 million grew 5% from $520.2 million for the same period of 2011. Excluding the impact of foreign currency translation, operating income grew 8 percent.  Diluted earnings per share of $1.52 for the first half of 2012 increased $0.03 from the prior-year period, which, again, had included a $0.06 favorable tax impact related to a foreign tax ruling and a $0.03 legacy tax benefit.

Revenue at Moody’s Investors Service totaled $893.9 million for the first six months of 2012, an increase of 5% from the same period in 2011. Moody’s Analytics revenue rose 19% from the first half of 2011 to $393.7 million.

Outlook: For the global MIS business, revenue for full-year 2012 is still expected to increase in the mid- to high-single-digit percent range. Within the U.S., MIS revenue is still expected to increase in the low-double-digit percent range, while non-U.S. revenue is still expected to increase in the low-single-digit percent range.  Corporate finance revenue is now projected to grow in the high-single-digit to low-double-digit percent range.  Revenue from each of structured finance and financial institutions is still expected to be flat to slightly up, while public, project and infrastructure finance revenue is still expected to increase in the mid-teens percent range.

For global MA, full-year 2012 revenue is still expected to increase in the high-teens percent range.  Within the U.S., MA revenue is now expected to increase in the high-teens to 20 percent range, while non-U.S. revenue is still expected to increase in the high-teens percent range. Revenue growth is still projected in the mid-single-digit percent range for research, data and analytics and in the low 20’s percent range for enterprise risk solutions, reflecting the December 2011 acquisition of Barrie & Hibbert as well as growth in the base business. Professional services revenue is now projected to grow by approximately 75%, inclusive of revenue from the late 2011 acquisition of a majority stake in Copal Partners and growth in MA’s existing financial training and certification business.

Source:  Moody’s Press Release

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