Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment research, today announced its second quarter 2006 financial results.
The company reported consolidated revenue of $76.3 million in the second quarter of 2006, a 36% increase from revenue of $56.2 million in the second quarter of 2005. Revenue for the second quarter included $6.8 million from Ibbotson Associates, Inc., a leading provider of asset allocation research and services, which Morningstar acquired on March 1, 2006. Consolidated operating income was $17.5 million in the second quarter of 2006, an increase of $4.4 million, or 33%, compared with $13.1 million in the same period a year ago. Morningstar's net income was $11.2 million in the second quarter of 2006, or 24 cents per diluted share, compared with $9.5 million, or 22 cents per diluted share, in the second quarter of 2005.
In the first six months of 2006, revenue increased $36.9 million, or 34%, to $146.3 million, compared with $109.4 million in the same period a year ago. Revenue for the first half of the year included $11.2 million from Ibbotson. Consolidated operating income increased 83% to $36.7 million in the first six months of 2006, compared with $20.0 million in the first six months of 2005. Net income was $24.6 million, or 53 cents per diluted share, in the first half of 2006, compared with $13.5 million, or 31 cents per diluted share, in the first six months of 2005.
"We generated strong organic revenue growth of 23% in the second quarter, driven by several key products - Investment Consulting, Advisor Workstation, Licensed Data, and Morningstar.com. We also benefited from incremental revenue from the Ibbotson acquisition, primarily led by Investment Consulting and EnCorr," said Joe Mansueto, chairman and chief executive officer of Morningstar. "We've retained all six contracts for independent equity research associated with the Global Analyst Research Settlement. Most of these contracts, which typically come up for renewal in the second quarter, cover the third year of the five-year settlement period."
Mansueto added, "In July, we acquired Aspect Huntley, a leading provider of equity research and information in Australia, and earlier this week we acquired the database division of InvestorForce, which will add critical mass to our institutional hedge fund and separate account coverage as well as to our client base. Both acquisitions are aligned with our growth strategies and will significantly enhance our offerings to individual investors, advisors, and institutions."Download the document now 46.2 kb (Adobe Acrobat Document)