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Moody's advances as 4th-quarter results surpass expectations and outlook meets estimates

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NEW YORK — Shares of Moody's Corp. (MCO) rose Friday after the credit ratings company reported solid fourth-quarter results, along with a 2015 outlook similar to Wall Street projections.

Its stock gained $4.47, or 4.8 percent, to $97.74 in morning trading.

The report comes at a time of scrutiny for ratings agencies like Moody's. On Tuesday, competitor Standard & Poor's settled a lawsuit that alleged it knowingly overstated ratings on the kinds of toxic mortgage investments that ignited the financial crisis, and failed to warn investors that the housing market was starting to collapse because the warning would have hurt its ratings business. S&P agreed to pay $1.38 billion to the federal government, 19 states, and Washington, D.C.

Ratings from Moody's, Standard & Poor's and Fitch can affect a company's ability to raise and borrow money and they can influence how much investors pay for securities. The companies have been criticized for giving good ratings to risky mortgage securities, and Congressional investigations said they contributed to the financial crisis by giving high ratings to securities based on risky subprime mortgages.

For the fourth quarter, Moody's reported net income of $236.3 million, or $1.12 per share, and it said its revenue grew to $877.5 million.

Analysts surveyed by Zacks Investment Research expected a profit of 94 cents per share on $846.5 million in revenue.

The New York-based company reported a profit of $988.7 million, or $4.61 per share, in 2014 while its revenue increased to $3.33 billion. Moody's is projecting a profit of $4.55 to $4.65 per share in 2015 and said its revenue should grow in the mid-single digits.

FactSet says analysts expect net income of $4.56 per share and revenue of $3.51 billion on average. That revenue estimate projects to growth of about 5 percent.

The company also said it plan to buy back $1 billion in stock.

Shares of Moody's have slipped 2.7 percent in 2015, but the stock has advanced 25 percent over the last 12 months. The shares reached an all-time high of $102.24 in November.

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Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on MCO at http://www.zacks.com/ap/MCO

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Keywords: Moody's, Earnings Report

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