(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, on strong 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 spurred investors to spend more on analytics and data-related products to enable better investments.
This has helped firms such as Moody's to perform well.
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 from a year earlier, while revenue in the investor service arm rose nearly 41% to $982 million.
Total revenue for the company came in at $1.81 billion, up from $1.47 billion a year earlier.
Adjustable net income was $585 million, or $3.21 per share, compared with $447 million, or $2.43 per share, a year earlier.
Moody's expects fiscal year 2024 adjusted earnings per share to be between $11.90 and $12.10, largely above analysts' average estimate of $11.69, according to data compiled by LSEG. Its previous forecast was in the range of $11 to $11.40.
MARKET REACTION
Shares of Moody's were up 2% in trading before the bell. They have gained about 25% so far this year.