(MCO) Moody’s Unveils New Mobile Website Version

Credit rating and research provider, Moody’s Corp. (MCO) recently launched a mobile version of Moodys.com, which can be accessed from any smartphone browser.

The mobile version will allow users to access Moody’s credit ratings and research specially formatted for smartphones and other mobile devices at any time and from any where.

We believe this is a strategic move from Moody’s as smartphones are becoming increasingly popular in the US. According to the media research company, Nielsen, 31% of US mobile phone users have a smartphone as of December 2010 and believes that smartphones will gain significant traction by the end of 2011.

Another research firm, eMarketer predicts that smartphone ownership will be approximately 43% of the total US mobile population by 2015.

According to Gartner, smartphones accounted for 297 million (19%) of the 1.6 billion mobile phones sold in 2010 worldwide, up 72.1% from 2009.

Gartner expects US sales of smartphones to grow from 67 million in 2010 to 95 million in 2011, and will likely become the highest-selling consumer electronic device. Gartner estimates that over 500 million smartphones will be sold in 2012.

The new mobile version is expected to boost Moody’s subscriber base, thereby driving revenue growth over the long term.

Moody’s reported strong first quarter results with earnings beating the Zacks Consensus Estimate of 53 cents by 14 cents (26.4%). Based on the strong results, Moody’s revised its full-year guidance and expects higher revenues from most of its operational segments.

Recommendation

We maintain our Outperform rating over the long term. We expect Moody’s to benefit from the gradual recovery in the U.S. economy, with the Investor Service and Analytics business delivering strong top-line results over the long term.

We believe the new mobile platform will provide a competitive edge to Moody’s over Dun & Bradstreet Corp (DNB) and privately held Fitch Ratings Inc.

Moreover, lower operating expense and higher share repurchases will improve profitability going forward.

Currently, Moody’s has a Zacks #1 Rank, which implies a Strong Buy rating in the short term (1-3 months).

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