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.