Morningstar posted net income of $15.8 million, or 33 cents per share, in the first quarter. That's up 18 percent from $13.4 million, or 29 cents per share, in the same period a year ago. The earnings figure, however, is below the average estimate of 36 cents per share by Wall Street analysts.
Morningstar released its report for Q1 2007 today. The news was not as good as expected with Wall Street analysts estimating 36 cent per share earnings and the actual being 33 cents per share. Morningstar does have a bright spot in this quarter as they acquired Standard & Poor's mutual fund data business on March 16, 2007.
Morningstar, Inc. (Nasdaq: MORN - News), a leading provider of independent investment research, today announced its first-quarter 2007 financial results. The company reported consolidated revenue of $95.4 million in the first quarter of 2007, a 36% increase from revenue of $70.1 million in the first quarter of 2006. Morningstar's first-quarter results included $12.2 million in revenue from acquisitions made during 2006 and 2007. Consolidated operating income was $24.0 million in the first quarter of 2007, an increase of 25% compared with $19.2 million in the first quarter of 2006. Morningstar's net income was $15.8 million in the first quarter of 2007, or 33 cents per diluted share, compared with $13.4 million, or 29 cents per diluted share, in the first quarter of 2006.
Morningstar acquired Standard & Poor's mutual fund data business on March 16, 2007, and made three key acquisitions in 2006. Excluding acquisitions and the impact of foreign currency translations, Morningstar's revenue increased 18% in the first quarter of 2007. Foreign currency translations had a positive impact of $0.4 million in the first quarter. Revenue excluding acquisitions and foreign currency translations is a non-GAAP measure; the accompanying financial tables contain a reconciliation to consolidated revenue.
Joe Mansueto, chairman and chief executive officer of Morningstar, said, "Our acquisition of S&P's fund data business was the highlight of the quarter, and the integration is going very well. The S&P acquisition is already making contributions to our Institutional and Advisor businesses, particularly outside the United States, and we're pleased with the progress we've made since we completed this deal less than two months ago. We've already re-branded many of the product and client Web sites, and our data integration should be completed in July.
"In addition to growth from recent acquisitions, our core business also continued to generate strong organic growth. Investment Consulting and Morningstar Advisor Workstation were the two largest drivers behind the increase, while Morningstar.com and Licensed Data also made important contributions," Mansueto added. "During the quarter we also launched a new series of Select Stock Baskets within Morningstar Managed Portfolios, our fee-based discretionary asset management service for financial advisors."
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