Morningstar profit rises on lower costs
Oct 24 (Reuters) - Morningstar Inc's third-quarter profit rose 27 percent as the investment research firm kept a lid on operating costs, mainly by setting aside less money for bonuses.
Net income rose to $27.1 million, or 56 cents per share, from $21.4 million, or 42 cents per share, a year earlier.
Revenue was largely flat at $161 million as much of the investment industry continues to struggle in an uncertain economic environment.
Morningstar said challenges faced by the variable annuity industry, which accounted for nearly 15 percent of its investment management unit's revenue, may continue to weigh on its revenue.
"Our customers in the variable annuity business are facing near-record low interest rates and market volatility," Chief Executive Joe Mansueto said in a statement.
Revenue from the investment management unit fell 7.7 percent to $31.6 million.
However, overall operating expenses fell 4 percent to $121 million in the quarter, boosting the company's margins.
"We've been clamping down on expenses, and we're seeing the benefits of greater cost control in areas such as travel, hiring, and advertising,"
"We're also taking steps to streamline and simplify our product lines and have announced several small divestitures," he added.
The companys said its investment information unit, which is also its biggest, registered a 2.8 percent growth on a 24.3 percent jump in licensing revenue from the company's Morningstar Direct investment analysis platform.
The Chicago-based company's shares, which have risen more than 7 percent in the past three months, closed at $62.54 on Wednesday on the Nasdaq.