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.

Moody's Results Q4 2012For Moody’s Corporation overall, global revenue of $754.2 million for the fourth quarter of 2012 was up 33% from the fourth quarter of 2011. U.S. revenue of $400.9 million for the fourth quarter of 2012 increased 40% from the fourth quarter of 2011, while revenue generated outside the U.S. of $353.3 million increased 26% from the prior-year period. Revenue generated outside the U.S. represented 47% of Moody’s total revenue for the quarter, down slightly from 50% in the year-ago period.

Moody's Revenue by  Geography 2012Global revenue for Moody’s Investors Service (“MIS”) for the fourth quarter of 2012 was $519.4 million, up 42% from the prior-year period. U.S. revenue of $306.6 million for the fourth quarter of 2012 increased 49% from the fourth quarter of 2011. Outside the U.S., revenue of $212.8 million increased 32% from the year-ago period. Foreign currency translation unfavorably impacted MIS revenue by 1 percent.

Global revenue for Moody’s Analytics (“MA”) for the fourth quarter of 2012 was $234.8 million, up 17% from the fourth quarter of 2011. Excluding the impact of foreign currency translation, revenue growth was 18 percent. Approximately two-thirds of MA’s growth in the fourth quarter was organic.

Outlook for 2013:  For Moody’s overall, the Company expects full-year 2013 revenue to grow in the high-single-digit percent range. Full-year 2013 operating expenses are projected to increase in the low-single-digit percent range. Full-year 2013 operating margin is projected to be between 42 and 43 percent and adjusted operating margin for the year is expected to be between 46 and 47 percent. The effective tax rate is expected to be approximately 32 percent.

Since the US Department of Justice has filed a civil suit against Standard & Poor’s the rating industry’s share prices nosedived (see chart).

Moody's Stock Chart Feb 08 2013

In conjunction with this suit Moody’s  made the following statement:

“…we have received a number of questions from shareholders and analysts about the U.S. Department of Justice’s civil complaint filed this week against McGraw-Hill and S&P. As we have been disclosing in our 10-Q and 10-K filings, Moody’s, like other financial services firms, has been subject to heightened scrutiny, increased regulation, ongoing investigation and civil litigation. As such, Moody’s routinely receives inquiries and responds to requests for information, as well as hosts inspections and reviews by authorities in jurisdictions worldwide. While we believe specific matters are material, we communicate those matters in our filings and other disclosures to the market. Moody’s has not been named as a party in the Department of Justice’s complaint against McGraw-Hill and S&P. We have no basis to comment on that matter.”

Source:  Moody’s Earnings Release

Reuters reported on February 7th 2013: The Justice Department (DoJ) and multiple states are discussing also suing Moody’s Corp (>> Moody’s Corporation) for defrauding investors, according to people familiar with the matter, but any such move will likely wait until a similar lawsuit against rival Standard and Poor’s is tested in the courts.  Inquiries into Moody’s are in the early stages, largely because state and federal authorities have dedicated more resources to the S&P lawsuit, said the sources, who were not authorized to speak publicly about enforcement discussions.  Moody’s and DOJ have refused comments.