Moody's Raises Profit Forecast

(Reuters) – Ratings agency Moody's (NYSE:MCO) raised its full-year adjusted profit forecast above Wall Street estimates and posted a nearly 31% rise in third-quarter earnings on Tuesday, driven by robust demand for its research and analytics products.

Why It's Important

Growing expectations of a soft landing for the U.S. economy, as the Federal Reserve began its rate cut cycle in September, have encouraged investors to spend more on analytics and data-related products for better investments. This trend has positively impacted Moody's performance.

Key Quote

> "Moody's record-breaking revenue performance in the third quarter is a testament to our unwavering status as the Agency of Choice for our customers and our actions to prime the business for durable future growth," said CEO Robert Fauber in a statement.

By The Numbers

• Revenue in Moody's analytics unit, which provides financial intelligence and analytical tools, grew 7% to $831 million in the quarter ended Sept. 30, compared to a year earlier.
• Revenue in the investor service arm rose nearly 41% to $982 million.
• Total revenue for the company reached $1.81 billion, up from $1.47 billion a year ago.
• Adjustable net income was $585 million, or $3.21 per share, compared to $447 million, or $2.43 per share, a year earlier.
• Moody's anticipates fiscal year 2024 adjusted earnings per share will be between $11.90 and $12.10, significantly above analysts' average estimate of $11.69. The previous forecast range was $11 to $11.40.

Market Reaction

Shares of Moody's rose 2% in trading before the bell and have gained about 25% so far this year.