Moody’s third quarter revenue of $689 million, increased 30% over the prior-year period, and was the highest quarterly revenue Moody’s has achieved in its history. Moody’s benefited from double-digit revenue growth in all lines of business at MIS, with particularly strong performance in corporate finance, as well as continued strong growth in all areas of Moody’s Analytics.

“Moody’s achieved double-digit revenue growth in all lines of businesses at Moody’s Investors Service in the third quarter, with particularly strong performance in corporate finance. Moody’s also had continued strong growth in all areas of Moody’s Analytics,” said Raymond McDaniel, President and Chief Executive Officer of Moody’s. “Based on third quarter performance, we are raising our full-year 2012 EPS guidance to a range of $2.95 to $3.05, or $2.89 to $2.99 excluding a legacy tax benefit.”

Highlights by Segments:

Global revenue for Moody’s Investors Service (MIS) for the third quarter of 2012 was $473.5 million, up 35% from the prior-year period. U.S. revenue of $289.1 million for the third quarter of 2012 increased 45% from the third quarter of 2011. Outside the U.S., revenue of $184.4 million increased 21% from the year-ago period. Foreign currency translation unfavorably impacted MIS revenue by 4 percent.

  • Within MIS, global corporate finance revenue of $220.7 million in the third quarter of 2012 increased 71% from the prior-year period, reflecting broad strength in both investment-grade and speculative-grade markets.  Corporate finance revenue increased 81% in the U.S. and 53% outside the U.S.
  • Global structured finance revenue totaled $93.1 million for the third quarter of 2012, an increase of 14% from a year earlier. U.S. structured finance revenue grew 27% from the year-ago period, primarily due to strength in ratings of commercial mortgage-backed securities and collateralized loan obligations, while non-U.S. structured finance revenue was essentially flat to the prior-year period.
  • Global financial institutions revenue of $82.7 million in the third quarter of 2012 increased 15% compared to the prior-year period. U.S. financial institutions revenue was up 22%, primarily reflecting increased insurance company issuance for refinancing and M&A activity, while non-U.S. revenue grew 10% driven by stronger banking activity in Asia and Latin America.
  • Global public, project and infrastructure finance revenue was $77.0 million for the third quarter of 2012, an increase of 13% from the third quarter of 2011. U.S. revenue was up 11% from the prior-year period, primarily due to gains in public and infrastructure finance, while non-U.S. revenue increased 16%, reflecting growth in infrastructure finance in Europe.

Global revenue for Moody’s Analytics (MA) for the third quarter of 2012 was $215.0 million, up 20% from the third quarter of 2011. Excluding the impact of foreign currency translation, revenue growth was 21 percent:

  • Revenue from research, data and analytics of $123.8 million increased by 7% from the prior-year period, driven primarily by our CreditView offering and new sales of other data and analytic products.
  • Enterprise risk solutions revenue of $64.0 million was up 26% over the prior-year period, reflecting both the acquisition of Barrie & Hibbert in December 2011 and strong growth in products and services that support regulatory and compliance.
  • Revenue from professional services of $27.2 million was up 97% from the prior-year period, reflecting the acquisition of a majority stake in Copal Partners in November 2011.

In the U.S., MA revenue of $86.3 million for the third quarter of 2012 increased 14% from the prior-year period. Outside the U.S., revenue of $128.7 million grew 23% as compared with the same quarter of 2011.

Source:  Moody’s Earnings Release