Morningstar Reports Bullish 4th Qtr and Full Year 2015 Financial Results


Last week Morningstar, a Chicago-based provider of independent investment research, ratings, and investment analytics, announced 4th Qtr and full-year 2015 financial results which exceeded market expectations.

4th Qtr 2015 Results

Morningstar reported net income of $37.3 million or $0.85 earnings per share for the 4th Qtr 2015, beating the consensus estimate of $0.79 per share, and significantly above the $0.71 earnings per share reported for the 4th Qtr 2014.

Total revenue for the quarter totaled $201.6 million, an increase of 2.6% compared with the same period in 2014.  Morningstar broke out revenue in two different product groups — “Investment Information” and “Investment Management” — both of which reported good growth in the quarter. Investment information revenue (Morningstar’s research platform and their credit ratings business) increased 7.5%, to $154 million, in the fourth quarter, while investment management revenue grew 14%, to $37.2 million during the same period.

Joe Mansueto, chairman and chief executive officer of Morningstar, explained the firm’s performance, “We had a good quarter, led by strong results for Workplace Solutions, our retirement and financial wellness offering, and Morningstar Direct, our institutional investment research platform. Organic revenue was up more than 5%, with particular strength from our international operations. We also did a nice job keeping expenses in line while continuing to invest in our key growth initiatives.”

Full-Year 2015 Results

For the year ended Dec. 31, 2015, net income was $132.6 million, or $3.00 per diluted share, compared with $78.3 million, or $1.74 per diluted share, in 2014.  Net income for 2014 reflected a non-recurring expense of $61.0 million related to a previously announced litigation settlement.

For the year, revenue was $788.8 million, an increase of 3.8% compared with $760.1 million in 2014. Organic revenue, which excludes acquisitions, divestitures, and the effect of foreign currency translations, rose 6.8%, or $51.5 million, for the year.  Operating income for the full year totaled $190.6 million, an increase of 80.5% compared with $105.6 million in 2014.

Our Take

Despite the difficult market conditions that many financial services firms experienced late last year, Morningstar was able to eke out modest revenue growth and solid earnings gains during the 4th Qtr – primarily benefiting from a diversified revenue base and effective expense management.

While a much smaller part of Morningstar’s overall business, its investment management business rose 14% due in part to strong AUM growth in its retirement solutions practice.  Clearly the lesson that other independent research firms should learn from Morningstar’s recent performance is not placing all your eggs in one basket.



About Author

Mike Mayhew is one of the leading experts on the investment research industry. In addition to founding Integrity Research, Mike is on the board of directors of Investorside Research Association, the non-profit trade association for the independent research industry, and a frequent speaker on research industry trends and developments. Mike has over thirty years of research industry experience. Email:

Leave A Reply