Expectations should be pretty low for Moody's (NYSE:MCO) these days. It made a fortune over the years rating the quality of, among other things, collateralized debt obligations -- one of everybody's favorite punching bags of blame for our current financial panic.

Moody's third-quarter net income came in at $113 million, or $0.46 per share, down from $137 million, or $0.51 per share earned in the same quarter last year. Revenue slid to $433 million, down from $525 million last year.

Relatively speaking, the results are actually pretty good. Think about it … companies that relied on the accuracy of Moody's ratings -- names like Citigroup (NYSE:C), Ambac Financial (NYSE:ABK), and UBS (NYSE:UBS) -- have had their books absolutely ravaged in the past year; they now consider net income some sort of fairytale. Moody's doesn't hold all the blame for their woes, but it's nonetheless amazing that the company hasn't yet been chased down by angry Wall Street militias.

Just last week, a group of rating-agency executives, including Moody's CEO Raymond McDaniel, were grilled by Congress over their blatant bias for profits above accuracy over the years. One comment by an employee of Moody's rival S&P -- caught telling a colleague that their products "could be structured by cows and we would rate it" -- became a symbol of this abuse.

That kind of attitude in the ratings industry is a serious setback. When their reputation is the backbone of their business, and suddenly Congress is scorning them for their immorality, you have to think that companies like Moody's have suffered a wound that won't heal for years to come.

As for the short term, management lowered 2008 earnings expectations this morning. It now expects to earn between $1.71 and $1.77 per share this year, a notch below the $1.83 expected by analysts.  

I'm not too jovial about Moody's prospects, but it still holds a 3-star rating in our CAPS ranking universe … not too bad, all things considered. Care to share your thoughts? Click here to come on over to CAPS and tell us how you feel. It won't cost you a dime.

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Fool contributor Morgan Housel doesn’t own shares in any of the companies  mentioned in this article. Moody's is a Motley Fool Inside Value and Stock Advisor recommendation. The Fool has a disclosure policy.