Moody’s Profit Beats Estimates on Higher Bond-Rating Revenue

Updated on

Moody’s Corp. reported first-quarter profit that exceeded analysts’ estimates as the world’s second-largest credit rater benefited from surging corporate-debt sales.

Net income rose to $230.1 million from $218 million a year earlier, the New York-based company said Friday in a statement distributed by Business Wire. Profit excluding certain items was $1.11 a share, more than the $1.03 average estimate of 10 analysts in a Bloomberg survey. Revenue rose 13 percent to $865.6 million, Moody’s said.

Revenue at Moody’s Investors Service, the credit-ratings unit that accounts for about 70 percent of sales, climbed 14 percent to $602.3 million. Issuance of company bonds in the U.S. rose to $633.8 billion through April from $584.4 billion in the year-earlier period as issuers took advantage of borrowing costs near historic lows, according to data compiled by Bloomberg.

The company reaffirmed its full-year earnings guidance of $4.55 to $4.65 a share even amid expectations of “uneven global growth” and a stronger U.S. dollar’s impact on exchange rates, according to the statement. The company still expects revenue at Moody’s Investors Service to increase in the “mid-single-digit percent range” in 2015.

Revenue from rating structured-finance debt rose 6 percent to $101.3 million, while sales from Moody’s Analytics, which distributes research and data, gained 11 percent to $263.3 million.

Trailing Shares

Shares of Moody’s have gained 12 percent to $107.52 this year, trailing the 17 percent gain for McGraw Hill Financial Inc., whose Standard & Poor’s credit-rating business is the world’s biggest. McGraw Hill on Tuesday reported first-quarter profit that beat analysts’ estimates, also fueled by a jump in U.S. corporate-debt sales.

McGraw Hill agreed in February to settlements over government claims that S&P inflated mortgage-bond ratings before the financial crisis and later bent its criteria to win business grading commercial-mortgage securities.

Moody’s conduct during the credit crisis is still being examined. The company is facing lawsuits from Connecticut and Mississippi, which were among more than a dozen states that joined the Justice Department in settling their cases against S&P.

(Moody’s will hold a conference call for analysts and investors at 11:30 a.m. New York time. To listen, access the company’s website at

Before it's here, it's on the Bloomberg Terminal. LEARN MORE