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Moody's shares rally on higher Q1 profit & revenue, raises 2011 EPS guidance


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.

Quick facts: Moody's Corporation

Price: 278.14 USD

Market: NYSE
Market Cap: $52.18 billion

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