Moody’s reported revenue of $430.7 million for the three months ended March 31, 2008, a decrease of 26% from $583.0 million for the same quarter of 2007. Operating income for the quarter was $199.3 million, a 35% decline from $304.7 million for the same period last year.
U.S. revenue of $232.8 million for the first quarter of 2008 decreased 39% from the first quarter of 2007, while non-U.S. revenue of $197.9 million decreased 3% from the same period. Moody’s global revenue results included approximately 200 basis points of positive impact from currency translation. Non-U.S. revenue accounted for 46% of Moody’s total revenue for the quarter, up from 35% in the year-ago period.
Revenue at Moody’s Investors Service for the first quarter of 2008 was $298.2 million, a decrease of 37% from the prior-year period. Non-U.S. revenue of $131.4 million represented 44% of total MIS revenue. Changes in revenue and operating income were positively impacted by foreign currency translation of approximately 200 basis points and 220 basis points, respectively.
Within the ratings business, global structured finance revenue totaled $107.2 million for the first quarter of 2008, a decrease of 57% from a year earlier. U.S. structured finance revenue decreased 69%, driven by significant declines in issuance across most asset categories. Non-U.S. structured finance revenue decreased 29%, led by declines in the European credit derivatives and commercial real estate finance sectors.
Global corporate finance revenue of $71.5 million in the first quarter of 2008 declined 31% from the same quarter of 2007. Revenue in the U.S. declined 41% from the prior year period. Significant revenue growth from rating U.S. investment grade debt was more than offset by high double-digit declines in revenue from speculative-grade bond and bank loan ratings. Outside the U.S., corporate finance revenue decreased 6% due primarily to declines in revenue from rating European speculative-grade securities.
Global financial institutions revenue of $64.0 million decreased 4% for the first quarter of 2008. Financial institutions revenue in the U.S. declined 5% as growth in the banking sector was more than offset by revenue declines in the insurance, and finance and securities sectors. Outside the U.S., revenue decreased 4% as growth in the insurance sector was more than offset by declines in revenue from the larger European banking sector.
Global public, project and infrastructure finance revenue was $55.5 million for the first quarter of 2008, 9% higher than in the first quarter of 2007, reflecting solid double-digit growth in project and infrastructure finance. Public, project and infrastructure finance revenue in the U.S. was flat with the prior year period. Non-U.S. revenue increased 32% due to strong growth in both project finance and public finance.
Moody’s Analytics revenue rose to $132.5 million, up 20% from the same quarter of 2007 with non-U.S. revenues contributing 50% of the total. All three business lines – subscriptions, software, and consulting – delivered double-digit percent growth. Revenue from subscriptions rose to $118.3 million, contributing the greatest dollar growth. Foreign currency translation positively impacted operating results, increasing revenue and operating income growth by approximately 220 basis points and 310 basis points, respectively. Source: Moody’s Press Release
BIIA Newsletter April 2008 Issuee
