Morningstar's 1st Quarter Performance Tops Wall Street Estimates


New York, NY – Last week, Morningstar Inc., the mutual fund rating and investment research provider, reported first-quarter 2008 earnings were up 47 cents per share or $23.1 million from comparable year-ago profits of $15.8 million, or 33 cents a share. Morningstar’s reported first quarter performance was 3 cents a share ahead of consensus.Morningstar’s first quartar revenue totaled $125.4 million for the three-month period, up 31.4% from year earlier levels, and above the average analysts’ estimates of $122 million.

Revenue from Morningstar’s institutional business segment reportedly rose 47% in the first quarter when compared to the 4th quarter of 2007, while its advisor business segment posted revenue growth of 18.2%.

Management explained that the better than expected sales total was driven by strong gains in Licensed Data and Investment Consulting. Management, however was quick to note that buy-side asset levels had fallen off in the first quarter — a development that could prompt some clients to limit spending on Morningstar services in the future.

Morningstar also noted that the total number of professionals employed by the firm surged to 2,040 at the end of the first quarter from 1,650 at the same time last year. This increase reflected both employees gained in acquisitions, as well as continued hiring in the U.S. and China.

Besides being the leading supplier of mutual fund analysis and ratings to both retail and institutional investors, Morningstar was one of the large winners in licensing research to the various investment banks participating in the Global Research Analyst Settlement. The Settlement is slated to end in the third quarter of 2009.


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