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DOW JONES NEWSWIRES
Moody's Corp. (MCO) post 15% profit growth in the fourth quarter amid strong revenue gains. The profit topped analyst estimates.
But the credit-ratings and research agency projected 2010 earnings below estimates--$1.75 to $1.85 a share compared with an average analysts' estimate of $1.87, according to Thomson Reuters. Moody's also sees revenue growth in the high single digits on a percentage basis, versus an analysts' view for growth of 8%.
A steady stream of new debt issuance has reinvigorated the bond market--and the market to rate debt. Last week, McGraw-Hill Cos. (MHP), owner of rival agency Standard & Poor's Ratings Services, reported profit jumped 44%, well outstripping estimates, partly thanks to continued recovery in global corporate issuance.
In the most recent period, corporate-finance revenue nearly doubled, driven by activity in high-yield bonds. Global structured-finance revenue fell 14% at Moody's, though it was up 5% in the U.S. In previous results, jumps in investment-grade and high-yield corporate-bond issuance had also helped cushion declines in revenue from structured-finance transactions.
Moody's posted a profit of $101.9 million, or 43 cents a share, compared with $88.7 million, or 37 cents a share, a year earlier. Revenue increased 20% to $485.8 million.
Analysts polled by Thomson Reuters projected earnings of 41 cents on $462 million in revenue.
U.S. revenue rose by 25%, while international revenue was up 16% and accounted for half of Moody's total revenue, slipping from 52% a year earlier.
Shares in Moody's closed Wednesday at $28.10 and weren't active premarket.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291; joan.solsman@dowjones.com