Moody’s Second-Quarter Profit Fell Forty-Eighty Percent
Hurt by a steep slide in demand for credit ratings for structured products in the year-long credit crisis, Moody's Corp, the parent of Moody's Investors Service, on Wednesday said second-quarter profit fell 48 percent.
Net income declined to $135.2 million, or 54 cents a share, from a record $261.9 million, or 95 cents, a year earlier, New York-based Moody's said today in a statement. Revenue dropped 25 percent to $487.6 million.
Moody's and larger rival Standard & Poor's are suffering from a plunge in bond sales that stifled demand for credit ratings. Revenue from mortgage-backed securities and CDOs dropped 56 percent in the quarter. Moody's Chief Executive Officer Raymond McDaniel, who cut expenses 10 percent by firing workers and reducing compensation, said he remains "cautious'' about the chances of a rebound in the credit markets this year.
"First-half results reflect persistently difficult credit market conditions,'' McDaniel said in the statement.
Published on July 30, 2008
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