(Reuters) - Credit rating agency Moody’s Corp (MCO.N) reported a higher-than-expected quarterly profit as revenue rose from its bond ratings business, and the company raised its full-year revenue growth forecast.
Revenue from the company’s bond ratings business, its largest, increased 16 percent in the second quarter. The business accounts for about 70 percent of Moody’s total revenue.
Bond markets globally have picked up amid higher demand from pension funds, dovish U.S. Federal Reserve policy and concerns among investors about long-term global economic growth.
Global debt issuance rose 12 percent to $1.58 trillion in the quarter ended June 30, according to Thomson Reuters data.
Moody’s acquired a majority stake in Indian credit ratings and research firm ICRA Ltd in June for about $86 million to expand its footprint in the debt market in India.
The rating company has also ramped up its analytics business by buying Indian research firm Amba Investment Services last year and U.S. loan origination software maker WebEquity Solutions in June.
Revenue from Moody’s analytics division, which sells financial research and data for assessing risk, rose 15 percent in the second quarter.
Moody‘s, Standard & Poor’s Ratings Services and Fimalac SA-owned LBCP.PA Fitch Ratings together hold a 95 percent share of the global credit rating market.
Moody’s raised its 2014 revenue growth forecast to low double digits in percentage terms from high single digit.
Net income attributable to the company rose to $319.2 million, or $1.48 per share, in the quarter ended June 30 from $225.5 million, or $1 per share, a year earlier.
On an adjusted basis, Moody’s earned $1.12 per share.
Revenue rose 16 percent to $873.5 million.
Analysts on average had expected earnings of $1.01 per share on revenue $803.4 million, according to Thomson Reuters I/B/E/S.
Moody’s shares closed at $92.48 on the New York Stock Exchange on Thursday. The stock has gained about 18 percent this year to Thursday’s close.
Reporting by Neha Dimri in Bangalore; Editing by Kirti Pandey