Moody's 3rd-qtr profit jumps 41 pct, ups forecast

NEW YORK -- The ratings agency Moody's Corp. on Friday reported big gains in profit and revenue for the third quarter, as it increased business across the world, benefited from a stronger corporate debt market and made use of two companies that it bought last year.

The company raised its profit prediction for the year after third-quarter net income rose 41 percent, although it cautioned that there was "an important degree of uncertainty" surrounding its outlook, especially given the weak economy in Europe.

In the July-September quarter, net income grew to $183.9 million from $130.7 million. On a per-share basis, earnings amounted to 81 cents, up from 57 cents.

After stripping out the impact of a tax benefit, per-share earnings were lower, at 75 cents, but still easily beat the 62 cents expected by analysts polled by FactSet. Analysts generally strip out one-time items when they are making predictions.

Revenue jumped 30 percent, to $688.5 million from $531.3 million, leaping past analysts' expectation of $620.7 million. The company grew revenue by double digits in the U.S. and internationally. Revenue from Moody's Investors Service, the well-known branch that issues ratings on the debt of companies and governments, jumped 35 percent, with a big boost coming from the division that rates companies' debt offerings. Moody's said there was "broad strength" in the corporate debt market, for both investment-grade and junk bonds.

Revenue from Moody's Analytics, the smaller unit that offers research and risk management, rose about 20 percent. The revenue gains were partly driven by acquisitions that Moody's made in late 2011. In December, Moody's bought a company called Barrie & Hibbert, which makes risk management modeling tools. In November, it bought a majority stake in Copal Partners, a research and analytics firm.

The company raised its profit prediction for the year, an unusual move in what has largely been a disappointing earnings season. The company now expects per-share profit of $2.95 to $3.05, after previously predicting $2.76 to $2.86. Analysts expect earnings of $2.75 per share.

The company's stock rose 1.1 percent to $46.22 in premarket trading. Shares have gained 60 percent over the past 12 months.