Summary
Moody's Corporation (MCO) reported a significant revenue decline of 22.3% in 2008 to $1.76 billion, primarily driven by a 32.3% drop in revenue from its Moody's Investors Service (MIS) segment. This decline was attributed to the severe credit market disruptions that began in mid-2007, leading to a substantial reduction in debt issuance activity. Despite the challenging market, Moody's Analytics (MA) segment showed resilience, with revenue growing by 14.9% to $550.7 million, driven by strong performance in subscriptions, software, and consulting. Operating income decreased by 33.8% to $748.2 million, reflecting the impact of lower revenue and increased expenses related to depreciation and amortization, partly due to acquisitions and asset impairments. Diluted Earnings Per Share (EPS) fell to $1.87 from $2.58 in the prior year. The company's balance sheet shows total assets of $1.77 billion and shareholders' deficit of $994.4 million, indicating the impact of the market downturn and share repurchases. Moody's continues to manage its financial resources, with a share repurchase program in place and a focus on cost control measures to navigate the uncertain economic environment.
Financial Highlights
53 data points| Revenue | $1.76B |
| R&D Expenses | $13.20M |
| SG&A Expenses | $441.30M |
| Operating Expenses | $1.01B |
| Operating Income | $748.20M |
| Net Income | $457.60M |
| EPS (Basic) | $1.89 |
| EPS (Diluted) | $1.87 |
| Shares Outstanding (Basic) | 242.40M |
| Shares Outstanding (Diluted) | 245.30M |
Key Highlights
- 1Revenue decreased significantly by 22.3% to $1.76 billion in 2008, largely due to a 32.3% decline in the Moody's Investors Service (MIS) segment caused by credit market disruptions and reduced debt issuance.
- 2Moody's Analytics (MA) segment demonstrated growth, with revenue increasing by 14.9% to $550.7 million, driven by strong performance across its subscription, software, and consulting businesses.
- 3Operating income declined by 33.8% to $748.2 million, reflecting lower revenues and increased operating expenses, including higher depreciation and amortization.
- 4Diluted Earnings Per Share (EPS) fell to $1.87 in 2008 from $2.58 in 2007.
- 5The company repurchased approximately 4.8 million shares of common stock in Q4 2008 under its ongoing share repurchase program.
- 6Moody's maintained a total debt of $1.47 billion at year-end 2008, with a Debt/EBITDA ratio below the covenant limit of 4.0.
- 7The company faces significant litigation and regulatory scrutiny related to its role in rating structured finance products during the financial crisis.