Proactiveinvestors USA & Canada Moody's Corporation https://www.proactiveinvestors.com Proactiveinvestors USA & Canada Moody's Corporation RSS feed en Fri, 24 May 2019 16:14:20 -0400 http://blogs.law.harvard.edu/tech/rss Genera CMS action@proactiveinvestors.com (Proactiveinvestors) action@proactiveinvestors.com (Proactiveinvestors) <![CDATA[News - Fund managers placed on negative by Moody’s ]]> https://www.proactiveinvestors.com/companies/news/170068/fund-managers-placed-on-negative-by-moodys-170068.html Investors have been served a bleak outlook by ratings agency Moody’s (NYSE:MCO) on Tuesday.

The agency has shifted its outlook for the global asset management industry from “stable” to “negative” as the growth of passive investment strategies continues to threaten fees in the industry.

The ratings agency said increased regulation and “underwhelming” performance from active managers compared with cheaper passive investment funds have “disrupted” the industry.

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Tue, 06 Dec 2016 16:19:00 -0500 https://www.proactiveinvestors.com/companies/news/170068/fund-managers-placed-on-negative-by-moodys-170068.html
<![CDATA[News - Big Three ratings agencies could face a new competitor ]]> https://www.proactiveinvestors.com/companies/news/129784/big-three-ratings-agencies-could-face-a-new-competitor-129784.html Much-maligned and even accused of responsibility for the credit crisis of 2007, the top global credit ratings agencies could soon have a new headache to contend with as US regulators have approved a new service to challenge the Big Three.

US securities regulators approved an application from a Morningstar subsidiary to offer credit ratings on companies and financial institutions, an activity that has long been dominated by S&P Global Ratings, Moody’s and Fitch.

Morningstar, which is best known for its one-to-five star ratings on mutual funds, has steadily expanded its credit rating business since the financial crisis, although its principal focus has been on the structured finance universe.

The approval last week from the Securities and Exchange Commission and announced today grants the company the ability to offer credit rating opinions on companies and banks as a nationally recognised statistical rating organisation too.

Japan and China already have their own credit ratings agencies but the latest applicant is the latest from the US or Europe and could pose a larger threat to the established brands.

 

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Mon, 29 Aug 2016 13:51:00 -0400 https://www.proactiveinvestors.com/companies/news/129784/big-three-ratings-agencies-could-face-a-new-competitor-129784.html
<![CDATA[News - Oil slump hurts provinces in Nigeria far more than Mexico ]]> https://www.proactiveinvestors.com/companies/news/123993/oil-slump-hurts-provinces-in-nigeria-far-more-than-mexico-123993.html Global oil prices may be at their highest since December on Tuesday but they are still crushing not only sovereign borrowers but also regional governments, according to a report from Moody's Investors Service.

Oil prices, at around $41 a barrel, are a third of what they were back in 2011. But the incapacity that oil economies face - at least on a sub-sovereign scale - varies wildly among different nations the credit ratings agency said.

The report found that Nigerian states are the most reliant on oil for revenue, while states in Mexico were the least dependent.

The analysis looked at oil-dependent sub-sovereign borrowers in five countries: Nigeria (Ba3 review for downgrade), Brazil (Ba2 negative), Russia (Ba1 review for downgrade), Mexico (A3 stable), and Canada (Aaa stable).

"The ability of oil-producing states to cope with falling crude prices depends on the extent of their reliance on oil revenues, and on whether they have sufficient financial flexibility to absorb a drop in income," said Maria del Carmen Martinez-Richa, a Vice President and Senior Analyst at Moody's.

"Sub-sovereign issuers in Nigeria are very dependent on oil and have a limited capacity to absorb fiscal shocks."

In Nigeria, oil contributed, on average, to 42% of state coffers. In Mexico, the proportion of state revenues, that come from oil is just 8%.

While Canada's three oil producing provinces, Alberta (Aaa negative), Saskatchewan (Aaa stable) and Newfoundland & Labrador (Aa2 negative), are
more reliant on oil revenue than Mexican states, they have a higher degree of financial flexibility. That means that they are well-equipped to withstand the drop in oil prices.

In Brazil, the impact on the two main oil producing states has varied. The state of Espirito Santo took measures to increase its tax base in early 2015. This limited the decline in its total revenues that year to only 2%, despite a 25% drop in its oil revenues.

By contrast, the state of Rio de Janeiro has been unable to adjust at the same pace. In 2015, Rio's revenues from oil royalties dropped 28% and its total revenues fell 19%.

The impact of the oil slump on Russian states has been mitigated by an accompanying decline in the value of the rouble versus the US dollar,
according to the report.

Russian regions have been protected from the full impact of weaker oil prices by a devaluation of the rouble. This has shored up rouble-denominated earnings from oil exports, which are priced in dollars. The weaker rouble will limit the overall decline in Russian regions' corporate tax revenues in 2016 to between 6% and 10%, the report added.

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Tue, 22 Mar 2016 15:59:00 -0400 https://www.proactiveinvestors.com/companies/news/123993/oil-slump-hurts-provinces-in-nigeria-far-more-than-mexico-123993.html
<![CDATA[News - Moody's surges to lifetime high as Q4 net tops estimates ]]> https://www.proactiveinvestors.com/companies/news/99791/moodys-surges-to-lifetime-high-as-q4-net-tops-estimates-51913.html Moody’s Corp. (NYSE:MCO), owner of the second-largest credit-ratings company, jumped to an all-time high after reporting better-than-expected profit in the fourth quarter on higher revenue.

Moody's advanced to $85.70 before paring gains to $80.92, up 5.4 percent, at 1:58 p.m. in New York.

Net income increased to $206.7 million in the three months ended Dec. 31, or 94 cents a share, from $160.1 million, or 70 cents a share, in the year-earlier period, the New York-based company said in a statement today. Profit stripping out one-time items rose 21 percent to 85 cents a share, above the 76-cents average estimate of analysts.

Sales grew 3.3 percent to $779.2 million in the October-to-December period, from $754.2 million a year earlier. Analysts tracked by Thomson Reuters expected the company to report revenues of $743.87 million.

Ratings revenue from company bond sales slid 1 percent to $242.6 million from $244.9 million, while sales from structured products increased 6 percent to $108.8 million from $102.9 million.

Gains from structured securities were boosted by a rise in issuance of commercial mortgage-backed debt and real-estate investment trusts, the company said. Sales from Moody’s Investors Service represent 70 percent of the firm’s revenue. 

The company's U.S. revenue in the quarter increased 3 percent from the year-earlier period to $417.2 million, while revenue generated outside the U.S. picked 3 percent to $362 million. Revenue generated outside the U.S. represented 46 percent of Moody's total revenue for the quarter, down from 47 percent in the year-earlier period.

Looking forward, Moody's forecasts per-share earnings of $3.90 to $4.00 this year on revenue growth in the high single-digit percent range, although the company anticipates "variable market conditions in 2014." Analysts expect the company to earn $3.91 a share for the year on revenue growth of 6.70 percent to $3.14 billion.

The company expects share repurchases for the year to be about $1 billion.

Moody’s shares rallied 55.9 percent last year. 

 

 

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Fri, 07 Feb 2014 14:15:00 -0500 https://www.proactiveinvestors.com/companies/news/99791/moodys-surges-to-lifetime-high-as-q4-net-tops-estimates-51913.html
<![CDATA[News - Moody's slumps as Q3 disappoints amid volatile markets ]]> https://www.proactiveinvestors.com/companies/news/98113/moodys-slumps-as-q3-disappoints-amid-volatile-markets-49265.html Moody's Corp. (NYSE:MCO), the second-largest credit rater, fell to the lowest in more than six weeks after reporting weak earnings and revenue for the third quarter and lowering its full-year guidance amid volatile market conditions.

Moody's dropped 3.6 percent to $70.54 at 10 a.m. in New York, after touching $66.91, the lowest price since Sept. 9. The stock rallied 45 percent this year before today, compared with a 23 percent gain for the S&P 500 (INDEXSP:.INX). 

Excluding a legacy tax benefit, per-share earnings for the three months ended Sept. 30 was 75 cents, the New York-based firm said in a statement today. That fell short of the 82-cent average estimate of analysts, according to Thomson Reuters.   

Net income was $183.9 million, flat with a year ago, while per-share earnings rose to 83 cents from 81 cents due to fewer shares outstanding in the latest quarter. 

Revenue grew 2.5 percent to $705.5 million, but trailed analysts' estimate of $718 million.

Looking ahead, the company narrowed its guidance for the year, now predicting $3.51 to $3.57 a share in earnings, from its previous view of $3.49 to $3.59. Revenue growth is still expected to be in the high-single-digits.

“Moody’s achieved year-on-year revenue, operating income and EPS growth in the third quarter, despite challenging comparisons to the prior year as well as volatile market conditions," the company quoted Chief Executive Officer Raymond McDaniel as saying.

Revenue from Moody's Investors Service, the company's ratings business and its biggest contributor to revenue, rose 1 percent to $478.1 million. 

Revenue from Moody's analytics increased 5.8 percent to $227.4 million.

Moody's also declared a regular quarterly dividend of 25 cents a share, payable on Dec. 10 to stockholders of record at the close of business on Nov. 20.

 

 

 

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Fri, 25 Oct 2013 10:41:00 -0400 https://www.proactiveinvestors.com/companies/news/98113/moodys-slumps-as-q3-disappoints-amid-volatile-markets-49265.html
<![CDATA[News - Moody's reports 9% jump in Q1 profit, raises 2013 outlook; shares gain ]]> https://www.proactiveinvestors.com/companies/news/94724/moodys-reports-9-jump-in-q1-profit-raises-2013-outlook-shares-gain-43482.html  

Moody's Corp. (NYSE:MCO), the second-largest credit rater, posted a 9 percent profit jump in the first quarter that surpassed analysts' projections as demand for credit ratings increased on a wave of corporate debt issues. Shares advanced in early trading.

Net income in the three months that ended March 31 increased to $188.4 million, or 83 cents a share, from $173.5 million, or 76 cents a share, a year earlier, the New York-based ratings agency said in a statement on Friday. Taking out certain items, including a 14-cent charge tied to litigation settlements, earnings were 97 cents a share, beating the 85 cents a share analysts on average had predicted.

Last month, the ratings firm agreed to pay $75 million to settle cases alleging it had inflated and hid risks in mortgage-related deals. 

Revenue for the January-to-March period jumped 13 percent to $731.8 million from $646.8 million. Analysts were modeling $718 million in revenue.

U.S. revenue grew 18 percent to $406.1 million, whereas international revenue — which accounts for 35 percent of total revenue — rose 8 percent to $325.7 million.

"Moody's results in the first quarter of 2013 reflected strong operating performance for both Moody's Investors Service and Moody’s Analytics,” the company's statement quoted CEO Raymond McDaniel as saying.

Within Moody's Investors Service, global corporate finance revenue jumped 29 percent to $258.3 million, helped by strong speculative-grade bank loan and bond issuance. Corporate finance revenue rose 25 percent in the U.S. and 36 percent outside the U.S.

And within Moody’s Analytics, revenue from research, data and analytics rose 8 percent to $129.6 million, driven by strong customer retention and solid growth from MA’s CreditView offering. 

Moody's also raised its full-year adjusted earnings forecast on Friday to $3.49 to $3.59 a share. Analysts were projecting $3.51 a share. It had earlier projected earnings to be between $3.45 a share and $3.55 a share.

The ratings agency announced a quarterly dividend of 20 cents a share payable on June 10 to stockholders of record at the close of business on May 20, according to a separate statement.

Moody's shares gained 1.1 percent, reversing earlier losses, to sit at $61.70, the highest intraday price since July 2007, at 9:48 a.m. in New York on Friday after the report was announced. The stock has doubled over the past 12 months.

 

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Fri, 03 May 2013 10:05:00 -0400 https://www.proactiveinvestors.com/companies/news/94724/moodys-reports-9-jump-in-q1-profit-raises-2013-outlook-shares-gain-43482.html
<![CDATA[News - Moody’s posts 66% Q4 profit rise, 2013 EPS guidance tops views ]]> https://www.proactiveinvestors.com/companies/news/92926/moodys-posts-66-q4-profit-rise-2013-eps-guidance-tops-views-40394.html  

Ratings agency Moody's (NYSE:MCO) Friday posted a 66-per-cent rise in fourth quarter earnings as it benefited from a from a stronger corporate debt market and said it expects full-year 2013 revenue to grow in the high-single-digit percent range. 

For the three months that ended December 31, net income rose to $160.1 million or 70 cents per diluted share, from $96.2 million or 43 cents per share, a year earlier. 

Operating income for the quarter was $260.2 million, up 51 per cent, while adjusted operating income was $296.2 million, up 54 per cent. 

Revenue increased 33 per cent to $754.2 million, from $567.1 million in the year-ago quarter.

Analysts polled by Thomson Reuters had called for per share earnings of 69 cents on revenue of $683.34 million.

"Moody's delivered strong financial performance throughout 2012, with double-digit revenue growth in most lines of business," said president and CEO Raymond McDaniel. 

"Despite ongoing economic uncertainty, we anticipate generally favorable market conditions to remain in place in 2013. 

“As a result, Moody’s expects revenue growth across all areas of the business, as well as earnings per share in the range of $3.45 to $3.55."

Analysts are expecting full-year 2013 per share earnings of $3.18.

U.S. revenue of $400.9 million increased 40 per cent year-over-year, and revenue generated outside the U.S. increased 26 per cent to $353.3 million.

The company noted that revenue generated outside the U.S. represented 47 per cent of total revenue, down from 50 per cent a year earlier.

Global revenue for Moody’s Investors Service (MIS) was up 42 per cent to $519.4 million, with U.S. revenue increasing 49 per cent and revenue outside the U.S. up 32 per cent.

Within MIS, global corporate finance revenue increased 73 per cent, reflecting strong issuance in both investment-grade and speculative-grade markets, Moody’s said.

Global structured finance revenue was up 18 per cent, on a 50-per-cent increase in the U.S., due to strength in ratings of commercial mortgage-backed securities and collateralized loan obligations. Non-U.S. structured finance revenue fell nine per cent.

Global financial institutions revenue increased 29 per cent, on increased banking issuance, the company noted. 

Global public, project and infrastructure finance revenue grew 19 per cent, primarily due to gains in project finance and growth in infrastructure finance in Europe.

Global revenue for Moody’s Analytics (MA) was up 17 per cent. Moody’s said that revenue from research, data and analytics increased by nine per cent, on “solid growth” from MA’s CreditView offering and strong customer retention. 

Fourth quarter operating expenses were $494.0 million, 25 per cent higher than in the prior-year period, primarily due to higher accruals for incentive compensation and Moody’s profit sharing plan, as well as incremental legal defense costs. 

Moody's is facing fraud claims filed by Abu Dhabi Commercial Bank, King County in Washington State, and other investors, who are suing the firm over losses in Cheyne, a structured investment vehicle. That trial is scheduled to start in May.

Earlier this week, the U.S. government launched a $5 billion civil suit against Moody’s rival Standard & Poor's and parent McGraw-Hill Companies Inc over mortgage bond ratings tied to the financial crisis.

According to a Reuters report, the U.S. Justice Department and multiple states are discussing suing Moody's for defrauding investors, but that would likely not come until the lawsuit against S&P is tested in the courts.

At year-end, the company said it had $1.7 billion of outstanding debt and $1.0 billion of additional debt.

Looking ahead, Moody’s expects global MIS revenue for full-year 2013 to increase in the high-single-digit percent range. 

For Moody's Analytics, full-year revenue is expected to increase in the high-single-digit percent range. 

Shares of the company were down 0.79 per cent in premarket activity, trading at $46.62.

 

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Fri, 08 Feb 2013 09:16:00 -0500 https://www.proactiveinvestors.com/companies/news/92926/moodys-posts-66-q4-profit-rise-2013-eps-guidance-tops-views-40394.html
<![CDATA[News - Moody's ups FY forecast as Q3 earnings rise 41% ]]> https://www.proactiveinvestors.com/companies/news/90746/moodys-ups-fy-forecast-as-q3-earnings-rise-41--36547.html  

Ratings agency Moody's (NYSE:MCO) Friday posted a 41 per cent rise in third-quarter earnings as it also raised its full-year earnings forecast, benefiting from a stronger corporate debt market.

"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 Moody's president and CEO Raymond McDaniel. 

"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."

The latest full-year forecast is up 7 per cent from a range of $2.76 to $2.86 it forecast on September 12.

Estimates have climbed as analysts saw more high yield - or junk - bonds come to market. Fees that rating agencies receive from issuers of these bonds tend to be higher than fees from investment grade companies.

For its latest quarter, Moody's said net income rose to $183.9 million, or 81 cents per share, from $130.7 million, or 57 cents per share, a year earlier. On an adjusted basis, the company earned 75 cents per share, beating the average analyst estimate of 63 cents, according to Thomson Reuters.

The company said adjusted operating income rose 36 per cent from a year earlier.

For the latest quarter, corporate ratings revenue increased 71 per cent from a year earlier, when the European debt crisis cast a shadow over the capital markets.

The company grew revenue by double digits in the U.S. and internationally. Revenue from Moody's Analytics, the smaller unit that offers research and risk management, rose about 20 per cent. The revenue gains were partly driven by acquisitions that Moody's made in late 2011.

 

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Fri, 26 Oct 2012 09:35:00 -0400 https://www.proactiveinvestors.com/companies/news/90746/moodys-ups-fy-forecast-as-q3-earnings-rise-41--36547.html
<![CDATA[News - Moody's Corporation raises FY 2012 guidance above Street expectations ]]> https://www.proactiveinvestors.com/companies/news/89506/moodys-corporation-raises-fy-2012-guidance-above-street-expectations-34623.html  

Moody's Corporation (NYSE:MCO) Wednesday announced it is raising its full-year earnings guidance and lifted full-year revenue forecast, with predictions ahead of Street expectations.

Moody's provides credit ratings, research, tools and analysis that contribute to transparent and integrated financial markets. 

Overall, the company said it now expects full-year 2012 revenue to grow approximately 12 to 13 per cent, compared its previous guidance for a revenue increase in the low-double-digit percentage range.

Analysts according to Thomson Reuters are expecting revenue of $2.54 billion.

Moody's said its adjusted earnings per share (EPS) are expected to be in the range of $2.70 to $2.80. That excludes an approximate six-cent-per-share benefit related to the “favorable resolution of a legacy tax matter” in the third quarter of 2012.

The firm’s prior guidance was for earnings at the higher end of a $2.62 to $2.72 per share range.

Non-adjusted EPS guidance range for the full-year 2012 is now $2.76 to $2.86, said the company.

Analysts are expecting EPS of $2.73.

The corporation said full-year 2012 expenses are now also expected to increase 12 to 13 per cent, while operating margin is still projected to be about 39 per cent. The company’s effective tax rate is now anticipated at 32 per cent.

For the global Moody’s Investors Service (MIS) business, revenue for the full-year 2012 is now expected to increase in the high-single-digit percent range. 

Within the U.S., MIS revenue is now expected to increase in the mid-teens percent range, while non-U.S. revenue is still expected to increase in the low-single-digit percent range, compared to a previous forecast of an increase in the mid- to high-single-digit per cent range.

Corporate finance revenue is now projected to grow in the mid-teens percent range, and revenue from structured finance is now expected to increase in the mid-single-digit percent range. 

Moody’s said revenue from financial institutions is still expected to be flat to slightly up, while public, project and infrastructure finance revenue is now expected to increase in the low-teens percent range.

For Moody’s Analytics, 2012 revenue is still expected to increase in the high-teens per cent range. In the U.S., the company said MA revenue is still expected to increase in the high-teens to 20 per cent range, while non-U.S. revenue is now expected to increase in the mid- to high-teens per cent range. 

The company said revenue growth is still projected in the mid-single-digit per cent range for research, data and analytics and in the low 20’s per cent range for enterprise risk solutions, reflecting its late 2011 acquisition of Barrie & Hibbert as well as growth in the base business.

Professional services revenue is still projected to grow by approximately 75 per cent.

Moody’s said it now expects full-year share repurchases of approximately $300 million, subject to available cash, market conditions, and other ongoing capital allocation decisions.

The company noted that its outlook for 2012 is based on assumptions about many macroeconomic and capital market factors, including interest rates, corporate profitability and business investment spending, merger and acquisition activity, consumer borrowing and securitization, and the amount of debt issued. 

“There is an important degree of uncertainty surrounding these assumptions, especially as they relate to Europe, and, if actual conditions differ, Moody's results for the year may differ materially from the current outlook,” it said in a recent release.

Moody's Corp. is the parent company of Moody's Investors Service, which provides credit ratings and research covering debt instruments and securities, and Moody's Analytics, which offers software, advisory services and research for credit and economic analysis and financial risk management. 

The company reported revenue of $2.3 billion in 2011.

Shares of Moody’s were up 0.80 per cent as at about 9:30 a.m. ET, trading at $42.84.

 

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Wed, 12 Sep 2012 09:32:00 -0400 https://www.proactiveinvestors.com/companies/news/89506/moodys-corporation-raises-fy-2012-guidance-above-street-expectations-34623.html
<![CDATA[News - Moody's Q2 profits beat the Street, shares rally ]]> https://www.proactiveinvestors.com/companies/news/88246/moodys-q2-profits-beat-the-street-shares-rally-32518.html Ratings agency Moody's Corp (NYSE:MCO) Thursday posted second quarter results that beat Street estimates, even as fewer bonds were sold worldwide and as worries over the eurozone debt crisis affected issuance plans.

Shares rose 10.18 per cent on the news, trading at $39.72 as at 2 pm ET.

For the three months that ended June 30, net income declined eight per cent to $172.5 million, or 76 cents per diluted share, from $189 million or 82 cents per diluted share, a year earlier.

Revenue of $640.8 million for the second quarter was up 5.8 per cent from $605.2 million in the second quarter of 2011.

Analysts had forecast earnings of 70 cents, on revenue of $632.14 million, according to Thomson Reuters.

“Moody’s revenue results for the second quarter reflected solid year-on-year growth in public finance and structured finance at Moody’s Investors Service as well as continued strong results from Moody’s Analytics,” said president and CEO Raymond McDaniel.

“Though market conditions remain volatile, we are reaffirming our 2012 EPS guidance range of $2.62 to $2.72 and still expect to be toward the upper end of the range.”

Second quarter expenses were $362.3 million, eight per cent higher than in the prior-year period, on increased headcount both from acquisitions in late 2011 and from growth in existing business.

Excluding the impact of foreign currency translation, Moody’s said expenses grew 10 per cent.

Moody’s reported operating margin for the second quarter was 43.5 per cent, down from 44.6 per cent in the second quarter of 2011.

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

Within MIS, the company noted that US revenue of $258.0 million for the quarter increased five per cent from a year earlier. Outside the US, revenue of $183.2 million decreased five per cent from the year-ago period.

Foreign currency translation unfavorably impacted MIS revenue by 3 percent.

Global structured finance revenue totaled $90.7 million for the second quarter, an increase of five per cent from a year earlier.

Moody’s said that revenue from global financial institutions was $77.8 million in the second quarter, down two per cent compared to the prior-year period.

Revenue from global public, project and infrastructure finance was $81.2 million, an increase of 12 per cent from the second quarter of 2011.

Global revenue for Moody’s Analytics (MA) for the second quarter was $199.6 million, up 19 per cent from a year earlier.

Looking ahead, the company said it still expects full-year 2012 revenue to grow in the low-double-digit per cent range.

Moody’s is the parent company of Moody's Investors Service, which provides credit ratings and research covering debt instruments and securities, and Moody's Analytics, which offers software, advisory services and research for credit and economic analysis and financial risk management.

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Thu, 26 Jul 2012 13:57:00 -0400 https://www.proactiveinvestors.com/companies/news/88246/moodys-q2-profits-beat-the-street-shares-rally-32518.html
<![CDATA[News - Moody's cuts ratings of 15 global banks ]]> https://www.proactiveinvestors.com/companies/news/87276/moodys-cuts-ratings-of-15-global-banks-30895.html Ratings agency Moody's downgraded 15 of the world's biggest banks on Thursday to reflect the risk of losses they face from volatile capital markets activities.

Amongst the banks to be downgraded by Moody's late Thursday were five major U.S. banks: Citigroup (NYSE:C), Morgan Stanley (NYSE:MS), Goldman Sachs (NYSE:GS), Bank of America (NYSE:BAC) and JPMorgan Chase (NYSE:JPM).

In Canada, Moody's lowered RBC (TSE:RY) by two notches as part of a review of global banks launched back on February.

European banks such as Deutsche Bank (NYSE:DB), Barclays (LON:BCS) and BNP Paribas were also downgraded.

Bank stocks around the world fell as investors prepared for the announcement, which was anticipated because Moody's had told banks it was coming, according to sources.

Morgan Stanley, one of the most closely watched firms in the review, had its long-term debt rating lowered by just two notches, one level less than expected.

The downgrade left Morgan Stanley more highly rated than Bank of America Corp and Citigroup, but a step below Goldman Sachs.

Credit Suisse (NYSE:CS), which last week was warned about weak capital levels by Switzerland's central bank, was the only bank in the group to suffer a three-notch downgrade. But its new A1 deposit and senior debt ratings still rank higher than many of its peers.

"All of the banks affected by today's actions have significant exposure to the volatility and risk of outsized losses inherent to capital markets activities," Moody's Global Banking Managing Director Greg Bauer said.

"However, they also engage in other, often market leading business activities that are central to Moody’s assessment of their credit profiles. These activities can provide important ‘shock absorbers’ that mitigate the potential volatility of capital markets operations, but they also present unique risks and challenges."

Financial markets have been bracing for the downgrades since February, when Moody's Investors Service said it had launched a review of 17 banks with global capital markets operations. These companies faced diminished profitability and growth prospects due to difficult operating conditions, increased regulation and other factors, Moody's said.

The ratings cuts could increase funding costs for Morgan Stanley and other banks and trading partners may ask for more collateral from an increase in the risk profile.

UBS (NYSE:UBS) could have been downgraded by three notches but was only bumped down two spots. HSBC (NYSE:HBC) could have fallen by two, but dropped only one notch. The U.K.'s  Royal Bank of Scotland (NYSE:RBS) and France's Societe Generale were also cut by one notch.

Nomura (NYSE:NMR) and Macquarie (ASX:MQG) were included in an original list of global banks under review, but have already been downgraded.

In a statement, Morgan Stanley said its ratings "still do not fully reflect the key strategic actions we have taken in recent years."

"With our de-risked balance sheet, stable sources of funding, diverse business mix and strong leadership team, we are well positioned to deliver for clients and shareholders."

Citigroup said: "We have been especially surprised by Moody's disproportionately adverse treatment of U.S. firms relative to banks in Europe."

Moody's went through "an exceptionally deliberate and detailed process in a four-month review in coming to this," Bob Young, Moody's managing director for North American banking, said when asked about criticism from U.S. banks and some analysts.

Young said that the agency had looked closely at the history of failures of lower-rated banks in setting the new ratings.

In downgrading Citigroup, Moody's said it considered the bank's volatile earnings and the problems it had managing risk in the financial crisis.

After the review, Moody's divided the global banks into three tiers, with HSBC, Royal Bank of Canada and JPMorgan at the top. Bank of America, Citigroup, Morgan Stanley and Royal Bank of Scotland were in the bottom tier.

Capital markets risks are significant for the highest-rated firms, but the institutions have stronger "shock absorbers" in the form of earnings from generally more stable businesses, Moody's said. The lowest-rated banks have more volatility or problems with risk management, and in some cases thinner shock absorbers.

A Bank of America spokesman said the second-largest U.S. bank has strengthened its governance and risk management and ended the first quarter of 2012 with record capital ratios, record liquidity and substantial reserves.

"We have significant liquidity and resources to serve clients and customers as we have transformed the company," the spokesman said.

Royal Bank of Scotland said the ratings changes were "backward-looking" and do "not give adequate credit for the substantial improvements the Group has made to its balance sheet, funding and risk profile", but said they were manageable.

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Fri, 22 Jun 2012 07:52:00 -0400 https://www.proactiveinvestors.com/companies/news/87276/moodys-cuts-ratings-of-15-global-banks-30895.html
<![CDATA[News - Moody's downgrades Nokia’s credit rating to junk status ]]> https://www.proactiveinvestors.com/companies/news/87082/moodys-downgrades-nokias-credit-rating-to-junk-status-30586.html Moody’s Investors Services has downgraded struggling Finnish cellphone maker Nokia’s (NYSE:NOK) credit rating to junk status, with a negative outlook.

Nokia’s crediting rating for long term senior unsecured debt has been downgraded to Ba1 from Baa3. This is the second downgrade by Moody’s within three months.

The company’s credit was also downgraded to junk status by Fitch Ratings and Standard & Poor's in April.

"Today's rating action reflects our view that Nokia's far-reaching restructuring plan delineates a scale of earnings pressure and cash consumption that is larger than we had previously assumed," said Wolfgang Draack, senior vice president at Moody’s.

Despite the downgrade, Moody's views the telecommunication company’s giant restructuring plan as a positive, and necessary to return to profitability.

Draack noted that a return to profitability also depends on Nokia transitioning its range of smartphones to the Windows operating system and stabilizing its feature phone business.

Nokia said Thursday it would lay off a further 10,000 jobs globally by the end of 2013 in a further drive to save costs and streamline operations.

Last year, Nokia announced more than 10,000 layoffs, aimed at cutting operating expenses by 1 billion euros or $1.31 billion by 2013.

The company will shut some research and development projects, including facilities in Burnaby, B.C. and Ulm, Germany and also close its core manufacturing plant in Salo, Finland but maintain research and development operations at the plant.

In April, Nokia announced one of its worst quarterly results ever, blaming tough competition for a 929 million euro net loss in the first quarter as sales plunged, especially in the smartphone market.

Last year, Nokia was still the world's top cellphone maker with annual unit sales of some 419 million devices, but in the last quarter of the year it posted a net loss of 1.07 billion euros, a marked reverse from the 745 million euro profit a year earlier.

In a separate statement on Friday, Fitch Ratings said the company over the last two months has moved further away from being able to generate positive margins and revenue.

The ratings agency added Nokia is now facing a "precarious combination of a depleted cash balance, without an end in sight to the declining cash flows."

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Fri, 15 Jun 2012 13:28:00 -0400 https://www.proactiveinvestors.com/companies/news/87082/moodys-downgrades-nokias-credit-rating-to-junk-status-30586.html
<![CDATA[News - Moody's Q1 earnings up 12% on higher bond activity ]]> https://www.proactiveinvestors.com/companies/news/85689/moodys-q1-earnings-up-12-on-higher-bond-activity-28274.html Moody's (NYSE:MCO) said Thursday that first-quarter earnings rose 12%, as its key ratings business returned to growth powered by stronger bond issuing activity.

For the three months ended March 31, Moody's posted a profit of $173.5 million, or 76 cents per share, up from a year-earlier profit of $155.5 million, or 67 cents. Total revenue increased 12 percent to $646.8 million.

Analysts surveyed by Thomson Reuters expected earnings of 69 cents a share on revenues of $622 million.

"Moody's delivered strong financial results for the first quarter of 2012, primarily reflecting increased corporate and public, project and infrastructure debt issuance as well as continued solid performance from Moody's Analytics," said Moody's president and chief executive officer Raymond McDaniel.

"While the level of activity was strong in the first quarter, we remain cautious about market conditions for the remainder of the
year. As a result, we are reaffirming our 2012 EPS guidance of $2.62 to $2.72 but now expect to be toward the upper end of the range."

The ratings agency remains cautious about market conditions for the remainder of the year. It expects revenue this year will
increase at the higher end of February's guidance range as it raises its expectation for Moody's Investor Services' non-U.S. and corporate-finance operations.

The company held its full-year earnings forecast at the same level because it anticipated expenses would grow at the higher end of prior guidance as well.

Moody's Investors Service, the credit-rating firm that is the company's biggest revenue contributor, posted an 9.7 percent increase to $452.7 million. Corporate finance - the biggest element of the unit's revenue - posted a 10 percent rise in revemues on stronger investment-grade bond issues and "solid" speculative-grade activity.

Rival credit rater Standard & Poor's experienced record U.S. speculative-grade issuance, which increased 14 percent in the first quarter based on results released earlier this week, although McGraw-Hill didn't comment on speculative-grade activity elsewhere in the world.

At Moody's Analytics, sales jumped 18 percent to $194.1 million, helped by increased sales of credit research and related data.

Overall operating margin fell to 41.6 percent from 43.3 percent, but Moody's lower interest expense meant its margin of pretax
income to sales improved.

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Thu, 26 Apr 2012 11:39:00 -0400 https://www.proactiveinvestors.com/companies/news/85689/moodys-q1-earnings-up-12-on-higher-bond-activity-28274.html
<![CDATA[News - Moody's warns it may downgrade 17 global financial services firms ]]> https://www.proactiveinvestors.com/companies/news/83768/moodys-warns-it-may-downgrade-17-global-financial-services-firms-25061.html Ratings agency Moody's (NYSE:MCO) warned late Wednesday it may cut the credit ratings of 17 global and 114 European financial institutions in another sign the impact of the euro zone government debt crisis is spreading throughout the global financial system.

The ratings agency was reviewing the long-term ratings and standalone credit assessments of a range of banks, Moody's added.

In a statement, Moody's said: "Capital markets firms are confronting evolving challenges, such as more fragile funding conditions, wider credit spreads, increased regulatory burdens and more difficult operating conditions." 

It said among 17 banks and securities firms with global capital markets operations, it might cut the long-term credit rating of UBS (NUSE:UBS), Credit Suisse (NYSE:CS) and Morgan Stanley (NYSE:MS) by as much as three notches following the review.

Among the banks that might be downgraded by two notches are Barclays (NYSE:BCS), BNP Paribas, Credit Agricole, Deutsche Bank (NYSE:DB), HSBC Holdings (NYSE:HBC), and Goldman Sachs (NYSE:GS).

Bank of America (NYSE:BAC) and Nomura (NYSE:NMR) were included in those that might be downgraded by one notch.

The US rating agency said in a separate statement its action on 114 financial institutions from 16 European nations reflected the impact of the debt crisis and deteriorating creditworthiness of its governments.

It cited more fragile funding conditions, increased regulatory burdens and a tougher economic environment for its review of banks and securities firms with global reach.

The warning shot from Moody's follows rounds of downgrades in European sovereign ratings as the euro zone's struggle to keep its weakest link Greece afloat has been driving up borrowing costs and straining finances of other nations.

Last Monday, Moody's cut the ratings of six European nations including Italy, Spain and Portugal and warned it could strip France, Britain and Austria of their top-level AAA grade.

Standard & Poor's cut France's and Austria's top ratings and downgraded seven other euro zone nations last month. It also cut the euro zone's bailout fund by one notch.

Moody's also downgraded the insurance financial strength ratings by one or two notches of several insurance companies, which it said related to their investment and operating exposures to Spain and Italy.

In its review of European financial institutions, Moody's said that once completed, the ratings would "fully reflect the currently
foreseen adverse credit drivers."

European banks' bond holdings of struggling euro zone nations Greece, Portugal, Ireland, Spain and Italy have trapped Europe in a vicious circle.

The falling value of the debt puts pressure on banks, which in turn weighs on lending and economic activity, making it tougher to sustain the growth that governments badly need to shore up their finances.

The biggest single group among the 114 institutions under review were headquartered in Italy, followed by Spain, with more than 20 each. Nine were headquartered in Britain, 10 in France and seven in Germany.

Moody's said nine of the 17 banks with global reach are included in the list of 114 financial institutions in Europe.

European Union leaders have been trying to put a financial "firewall" around the nations most afflicted by the euro zone debt
crisis. But jittery market sentiment suffered a fresh setback on Wednesday when several EU sources said that the euro zone was considering a delay in parts of a second bailout plan for Greece.

Moody's said that for 99 European financial institutions, the standalone credit assessments have been placed on review for downgrade. For 109 institutions, the long-term debt and deposit ratings have been placed on review for downgrade.

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Thu, 16 Feb 2012 08:05:00 -0500 https://www.proactiveinvestors.com/companies/news/83768/moodys-warns-it-may-downgrade-17-global-financial-services-firms-25061.html
<![CDATA[News - Moody's Q4 earnings miss estimates as debt crisis dampens revenue ]]> https://www.proactiveinvestors.com/companies/news/83546/moodys-q4-earnings-miss-estimates-as-debt-crisis-dampens-revenue-24701.html Ratings agency Moody's Corp (NYSE:MCO) said Wednesday that fourth-quarrter net income fell 30 percent as expenses rose and companies backed away from issuing bonds during the European debt crisis, hurting a key business segment.

For the three months that ended December 31, net income declined to $96.2 million, or 43 cents per share, from $137.4 million, or 58 cents per share, a year earlier.

The average estimate from six analysts surveyed by Thomson Reuters was for earnings of 49 cents per share.

Revenue of $567.1 million for the fourth quarter was flat as compared to the fourth quarter of 2010.

Moody's chairman and chief executive officer, Raymond McDaniel, said: "Moody's achieved strong performance for full-year 2011, with growth in all lines of business at both Moody's Investors Service and Moody's Analytics despite volatile business conditions.

"For 2012, we anticipate revenue growth across most areas of our business and earnings per share in the range of $2.62 to $2.72."

Fourth-quarter expenses rose seven percent, which the company said was primarily due to employing more people and spending more on technology to grow.

Ratings revenue declined four percent, driven by a 14 percent drop in corporate finance.

Revenue at ratings competitor Standard & Poor's, a unit of The McGraw-Hill Cos. (NYSE:MHP), fell eight percent in the fourth quarter.

Moody's Analytics business, which sells financial research, risk management tools and consulting services, worked to offset the decline in ratings. Analytics revenue increased 10 percent in the quarter, and made up 35 percent of the corporate total.

Moody's projected that 2012 revenue from the analytics business would increase by a percentage "in the high teens", and that ratings revenue would rise "in the mid-single-digit percentage range".

CEO McDaniel predicted late last year that the financial markets would improve and that companies would issue more bonds.

The company projected a 2012 profit of $2.62 to $2.72 per share, which would be up about five to nine percent from $2.49 in 2011.

The year-ago period included eight cents per share of tax benefits. The provision for income taxes increased in the quarter by $24 million, and the effective tax rate rose to 37 percent from 19.5 percent.

The company said it did not continue buying back shares in the fourth quarter, but issued stock for employee pay.

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Wed, 08 Feb 2012 09:51:00 -0500 https://www.proactiveinvestors.com/companies/news/83546/moodys-q4-earnings-miss-estimates-as-debt-crisis-dampens-revenue-24701.html
<![CDATA[News - Moody's posts mixed Q3 earnings, shares up ]]> https://www.proactiveinvestors.com/companies/news/80919/moodys-posts-mixed-q3-earnings-shares-up--20233.html Ratings agency Moody's (NYSE:MCO) Thursday reported mixed earnings for the third quarter in a turbulent time for markets, creating difficult conditions for the issue of financial instruments that the agency covers.

Shares were up four percent at 34.94 Thursday morning.

In the three months to September 30, the company posted a profit of $130.7 million, or 57 cents a share, down from $136 million, or 58 cents a share, a year earlier. Analysts estimated earnings of $0.47 per share.

Revenues for the quarter rose 3.5 percent to $531.30, missing consensus estimates of $542.78 million.

Moody's chairman and CEO, Raymond McDaniel, said: "Despite difficult debt issuance conditions, Moody's achieved year-on-year revenue and operating income growth in the third quarter of 2011, with strong performance by Moody's Analytics offsetting a modest revenue decline at Moody's Investors Service."

After notching impressive earnings growth in the first two quarters of the year on strong issuance of corporate debt, Moody's had cautioned more challenging issuance conditions in the US and Europe would challenge results in the back half of the year.

Revenues at credit ratings unit Moody's Investors Service, the company's biggest top line contributor fell 2 percent. Its global corporate finance and public, and project and infrastructure finance arms posted revenue declines of 11 percent and 2 percent respectively, while global structured finance posted a 17 percent increase.

Analytics revenue was up 16 percent.

Looking ahead, the company reaffirmed its earnings per share guidance for the full-year at the upper end of a $2.38 to $2.48 per share range.

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Thu, 27 Oct 2011 09:53:00 -0400 https://www.proactiveinvestors.com/companies/news/80919/moodys-posts-mixed-q3-earnings-shares-up--20233.html
<![CDATA[News - Moody's shares rally on higher Q1 profit & revenue, raises 2011 EPS guidance ]]> https://www.proactiveinvestors.com/companies/news/77303/moodys-shares-rally-on-higher-q1-profit-revenue-raises-2011-eps-guidance-14113.html Moody's Corp (NYSE:MCO) reported Wednesday that its first quarter profits grew 37% as revenue rose due to strong corporate debt activity, prompting a spike in the company's full-year guidance.

For the first three months of 2011, the ratings agency reported net income of  $155.5 million, or $0.67 per diluted share, compared to $113.4 million, or $0.47 per diluted share, in the year-ago period.

Total revenue for the corporation jumped 21% to $577.1 million from $476.6 million a year earlier. Analysts expected $0.54 earnings per share, on revenue of 521.47 million.

Sales from the Moody's investors services segment, the largest by revenue, rose 23% to $412.6 million, helped by 44% growth in corporate finance revenue as many companies rush to refinance their debt.

Sales from corporate finance climbed 52% in the US, and 31% internationally, a result of strong issuance activity in both investment-grade and high-yield markets, the company said.

US structured finance revenue rose 11% year-over-year, and 39% internationally, as strength in commercial real estate issuance and demand for ratings of government-sponsored facilities in Europe partially offset declines in asset-backed securities.

Global revenue for Moody's analytics unit, which includes sales from research, data and analytics services, was $164.5 million, up 17% from the first quarter of 2010.

Of Moody's total first quarter revenue, 48% was generated outside the US. US revenue rose 18%, while international revenue climbed 24%.

Total expenses rose 17% to $327.0 million during the first quarter.

The company raised its full year earnings per share guidance to a range of $2.22 to $2.32 per share, and increased its quarterly dividend by 22% to $0.14 per share.

Moody's previous earnings outlook for 2011 was in the range of $2.12 to $2.22 per share. The company's shares rose more than 9% in the first hour of trading on Wednesday to $39.24.

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Wed, 27 Apr 2011 10:10:00 -0400 https://www.proactiveinvestors.com/companies/news/77303/moodys-shares-rally-on-higher-q1-profit-revenue-raises-2011-eps-guidance-14113.html
<![CDATA[News - Moody’s ups full year revenue, earnings guidance on better than expected bond issuances ]]> https://www.proactiveinvestors.com/companies/news/75579/moodys-ups-full-year-revenue-earnings-guidance-on-better-than-expected-bond-issuances-11211.html Moody’s (NYSE:MCO) increased its guidance for its full year 2010 revenue and earnings per share, thanks to better than anticipated revenues for its ratings services for bond issuances and a lower than expected tax rate.


Full year and fourth quarter results from the New York headquartered group are due to be released before the start of trading on February 3rd, 2010.  


Previous guidance for the full was for “high-single to low-double-digit” percent growth for revenues and earnings per share of $1.90 to $1.96.  The company has now increased the full year revenue growth guidance to approximately 13% and upped the diluted earnings per share range to $2.08 to $2.14.


Full-year 2010 operating margin is expected to remain in the high-thirties percent range.


“The updated guidance is driven by a higher revenue forecast associated with robust fourth quarter bond market issuance benefiting Moody's Investors Service, and accelerated completion of software projects for customers of Moody's Analytics,” Moody’s explained.


“Updated guidance also reflects an estimated full-year 2010 effective tax rate of approximately 30% to 31%, which is below the previous projection of 33% to 34%, primarily due to utilization of foreign tax credits and lower foreign and state taxes.”

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Thu, 06 Jan 2011 14:20:00 -0500 https://www.proactiveinvestors.com/companies/news/75579/moodys-ups-full-year-revenue-earnings-guidance-on-better-than-expected-bond-issuances-11211.html
<![CDATA[News - Moody’s Benefits From Increased Debt Issuance ]]> https://www.proactiveinvestors.com/companies/news/74547/moodys-benefits-from-increased-debt-issuance--9603.html Credit-rating agency Moody’s (NYSE:MCO) reported today that third quarter profits increased by 36% thanks to increased debt issuance as well as increased merger and acquisition activity.

For the third quarter ended September 30, 2010, the company recorded profits of $136 million, or 58 cents per diluted share, compared to $100 million, or 42 cents per diluted share, for the same period the previous year.  Third quarter revenue came to $513 million, up from $452 million for the year-ago period. 

Analysts expected the company to earn 45 cents per share on revenues of $472 million.

By geographical region, almost half of Moody’s third quarter revenue came from abroad.  Non-U.S. revenue was $235 million for the quarter, up 6% on a year-over-year basis while U.S revenue rose 21% year-over-year to $278.3 million.
 
Moody’s Investors Service (MIS), the Moody’s credit-rating arm, brought in $358.2 million of revenue globally during the third quarter, 17% higher than same period a year ago.  About 58% of the division’s revenue came from the U.S.  

The strong performance from MIS was driven by increased debt issuance as well as increased merger and acquisition activity.  Corporate finance revenue, which includes revenue from these activities, saw an increase of 51% year-over-year to $144.9 million in the third quarter. 

Global revenue for the Moody's Analytics (MA) unit, for the third quarter of 2010 reached $155.1 million, 6% above the same quarter of 2009.  The increase was primarily driven by the delivery of risk management software projects and improving demand for research and data. About $71.1 million of MA’s revenues was generated in the U.S.

Moody's also raised its guidance for diluted earnings per share for fiscal 2010 to a range of $1.90 to $1.96.  Furthermore, the company said it expects revenue to increase in the high-single to low-double-digit percent range. 

The company opened higher by 4% after the announcement this morning but has subsequently slipped on intraday trading to close 2% lower than yesterday’s closing price.


[4:08:16 PM] Phil: i'm not sure why it declined, although they did declare a $0.105 per share dividend today

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Thu, 28 Oct 2010 21:31:00 -0400 https://www.proactiveinvestors.com/companies/news/74547/moodys-benefits-from-increased-debt-issuance--9603.html