Moody’s Cuts Guidance

Originally Published In the News March 11, 2008 1:05 PM

Moody’s has witnessed one of its most lucrative business lines disappear as structured product activity dries up. The company’s prodigious cash flow has been severely impaired, and the company is finally coming to grips with the issues:

“We have just a complete freeze in some market sectors, and we are trying to, frankly, catch up with that reality,” Chief Executive Raymond McDaniel said at a Bear Stearns & Co media conference in Palm Beach, Florida. “We have declining prices, we have liquidity issues, we have confidence issues.”

New York-based Moody’s now expects profit per share of $1.90 to $2.00, with revenue declining at a mid- to high-teens percentage rate. On Feb. 7 it had forecast profit per share of $2.17 to $2.25, with revenue decreasing by a low double-digit percentage.

Analysts on average had expected profit of $2.12 per share on revenue of $2 billion, Reuters Estimates said. The revenue figure would reflect an 11 percent year-over-year drop. Reuters

Lehman slashed their price target from $70 to $29 on the news, and lowered their rating to underweight from overweight.

Sad, but true.

Moody’s slashes outlook as credit crisis widens
Reuters

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