Morningstar: A Cannibal Cash Machine
Thu, Oct. 20, 6:14 PM
- Morningstar (MORN -1.5%) missed on top and bottom lines in its Q3 earnings report as revenue ticked up only slightly and transaction-based business continued to suffer.
- "Because of lower industry-wide issuance volume for commercial mortgage-backed securities, revenue for Morningstar Credit Ratings was down about $5 million, or 50%, year over year," says CEO Joe Mansueto. Internet ad sales showed weakness as well, he noted.
- Revenue grew 0.4% on a headline basis; organic revenue grew 1.1%. Operating income fell 4.6%, meanwhile, to $44.2M, and operating margin fell to 22.5% from a year-ago 23.7%.
- Revenue by type: License-based, $142.2M (up 3.9%); Asset-based, $43.1M (up 5%); Transaction-based, $10.8M (down 37.8%).
- Cash from operations was $60.4M; free cash flow came to $42.3M (down $21M from the prior year).
- Shares were flat in after-hours trading.
- Press Release
Thu, Oct. 20, 4:29 PM
Fri, Oct. 14, 9:17 AM
- Already a 20% owner of the private capital markets research and data provider company, Morningstar (NASDAQ:MORN) has agreed to buy the rest of PitchBook for about $180M, valuing the entire firm at $225M. PitchBook will continue to be led by founder and CEO John Gabbert, and Morningstar by Kunal Kapoor.
- With the deal, leading providers of research on public and now private companies will be under one roof.
- PitchBook had $31.1M in revenue in the 12 months ended June 30, and has over 300 employees located in Seattle, NYC, and London.
Fri, Sep. 30, 3:01 PM
Thu, Sep. 15, 7:30 PM
- A European Union court today confirmed a 2012 settlement between Thomson Reuters (NYSE:TRI) and antitrust regulators over its securities identification codes.
- Morningstar (NASDAQ:MORN) had been seeking to have the settlement overruled, charging Thomson Reuters with continued abuse of a dominant position with its Reuters Instrument Codes by not allowing a competitive service for real-time data streams.
- The General Court said commitments from Thomson Reuters were "correctly assessed as being capable of resolving the concerns raised by the Commission."
Tue, Sep. 6, 4:57 PM
- Morningstar (MORN -0.9%) has chosen President Kunal Kapoor to be its next CEO, beginning in 2017.
- Kapoor will succeed founder Joe Mansueto, who will become executive chairman and continue to serve as chairman of the board. The moves are effective Jan. 1.
- In order to limit the number of inside directors, Don Phillips has elected to step down from his seat effective Dec. 31. He'll remain a managing director for the company focusing on research innovation.
- Mansueto says he plans to focus more on strategy, capital allocation and advising Kapoor from the chairman role.
- Kapoor has been with Morningstar since joining as a data analyst in 1997.
Mon, Aug. 29, 2:12 PM
- The big-three corporate credit rating agencies - S&P Global (SPGI +0.8%), Moody's (MCO +1%), and Fitch - are about to face some competition after the SEC grants Morningstar (MORN +0.3%) the ability to offer credit ratings on companies and banks as a nationally recognized statistical rating organization (NRSRO).
- Best known for its one-to-five star ratings on mutual funds, Morningstar has been busy in credit ratings, but mostly on structured finance (think CMBS).
- This new approval would allow the company to move into corporate debt, and the company has plans to hire a number of new analysts for the job.
- Source: Eric Platt in the FT
Thu, Jul. 21, 7:16 PM
- Morningstar (MORN -0.4%) revenues declined and missed expectations in its Q2 earnings, and profits fell slightly but met consensus on a per-share basis.
- "Headwinds" won't keep the firm from focusing on key investment areas, says CEO Joe Mansueto, who pointed to "negative trends in industry-wide issuance volume for commercial mortgage-backed securities" tamping down revenue in its credit rating business, along with revenue declines in investment management products and Internet ad sales.
- Revenue fell 1.9% to $198.2M; organic revenue fell 1.3%.
- Premium subs to Morningstar.com fell 2.6%, to 119,019; registered users grew 3.8% to 8.699M.
- Morningstar Office licenses slipped 3.3% to 4,157, while Morningstar Direct licenses grew 11.3% to 12,064.
- Cash from operating activities was $71.4M; free cash flow was $55.5M (down $8.2M from the prior year).
- Press Release
Thu, Jul. 21, 4:47 PM
Tue, May 31, 7:35 PM
- Morningstar (NASDAQ:MORN) has acquired InvestSoft Technology in a move to shore up bond analysis.
- Terms weren't disclosed. InvestSoft helps firms analyze fixed-income securities and portfolios using its BondPro calculation engine.
- The company will rebrand InvestSoft's offering under the Morningstar name and gradually integrate it into data processing systems and existing products.
- InvestSoft founder Al Roitfarb will become head of architecture, fixed income, and CEO Todd Roitfarb will become head of fixed-income products.
Tue, May 17, 12:45 PM
- Morningstar (MORN +0.4%) has moved offices, taking its New York outpost and the headquarters of Morningstar Credit Ratings to 4 World Trade Center.
- It's taken a 10-year lease for 30,000 square feet, and so quadruples its space in NYC.
- Credit Ratings is a growing part of Morningstar's overall business. It expanded the business to include asset-backed securities last year, and it provided new issuance ratings on more than 40% of the world's commercial mortgage-backed securities.
- Over the past seven years, it's rated more than 240 new-issue structured finance transactions representing about $163B in securities issuance.
- Now read Morningstar, Inc.: A Value Investor's Delight? »
Fri, May 13, 5:09 PM
Thu, Apr. 21, 4:36 PM
- Morningstar (NASDAQ:MORN): Q1 EPS of $0.67 misses by $0.06.
- Revenue of $192.1M (+1.2% Y/Y) misses by $1.5M.
Thu, Mar. 31, 5:19 PM
- Morningstar (MORN +0.6%) has acquired RightPond (the d.b.a. of RequiSight LLC), a data provider for defined contribution and defined benefit plans for financial service providers.
- Terms weren't disclosed. The product reveals gaps, trends, outliers, and risk signals regarding plan performance, fees, capital flow, gatekeeper relationships, and best practices for the various types of plans.
- Morningstar will offer RightPond on a stand-alone basis until it's integrated into Morningstar Data and Morningstar Direct platforms and rebranded.
- Now read Morningstar, Inc.: A Value Investor's Delight? »
Fri, Feb. 26, 1:52 PM
- Morningstar (NASDAQ:MORN) declares $0.22/share quarterly dividend, in line with previous.
- Forward yield 1.11%
- Payable April 29; for shareholders of record April 8; ex-div April 6.
Wed, Feb. 17, 4:32 PM
- Morningstar (MORN +1.2%) beat expectations with profits that grew 18.4% in its Q4 report, but revenues missed slightly amid more currency headwinds. Shares were off 0.5% after hours.
- Organic revenues rose 5.4% for the quarter, and rose 6.8% for the full year. Q4 operating income was $50.1M (up 7.5%), or 24.9% of revenue.
- Key product revenues: Morningstar Data, $38.5M (up 9.3%); Morningstar Advisor Workstation, $27.4M (up 2.3%); Morningstar Direct, $26.7M (up 11.9%); Workplace Solutions, $18.3M (up 17.1%); Morningstar.com, $16.8M (up 3.1%).
- Total assets under management and advisement for Workplace Solutions rose 16.8% to $89.7B; for Morningstar Managed Portfolios, up to $12.9B form $12.6B. Licenses for Morningstar Direct were up 13.7% to 11,428.
- Free cash flow of $35M was down $6.3M from a year ago; full-year FCF was $181.6M.