It's been a heck of a year for Moody's
New York-based Moody's reported first-quarter earnings of $120.7 million, or $0.48 a share, a plunge from the same period last year of around 31% and 23%, respectively. The poor performance came as no surprise to investors, who've seen shares sliced 45% in the past year. The results did, however, easily surpass analysts' expectations of $0.35 a share in net income, giving shares a nice pop when announced Wednesday.
Revenue for the quarter took a 26% nosedive, coming in at $430.7 million, thanks in part to a 57% drop in structured products that include collateralized debt obligations (CDOs) -- a persistent headache in the wake of a soured real estate market. Reacting to the slump in business, management announced plans in January to cut 7.5% of the headcount, and trimmed the incentive-based pay that some think caused a conflict of interest when rating products for lucrative customers.
With a multiyear boom in credit-related products that had paid handsome dividends to Moody's and rival S&P Ratings (part of McGraw-Hill
Even one of Moody's largest shareholders, none other than Berkshire Hathaway
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