Morningstar Inc. (MORN, Financial) filed Quarterly Report for the period ended 2010-09-30.
Morningstar Inc. has a market cap of $2.43 billion; its shares were traded at around $49.33 with a P/E ratio of 32.6 and P/S ratio of 5.1. Morningstar Inc. had an annual average earning growth of 24.5% over the past 5 years.MORN is in the portfolios of Ron Baron of Baron Funds, Chuck Royce of Royce& Associates, Kenneth Fisher of Fisher Asset Management, LLC, Jim Simons of Renaissance Technologies LLC.
In the third quarter of 2010, our consolidated revenue increased 16.4% to $139.8 million. Revenue for the first nine months of the year rose 13.4% to $404.2 million. We had $12.0 million in incremental revenue from acquisitions during the third quarter, which contributed about 10 percentage points to our consolidated revenue growth. Currency movements had a slight negative effect in the third quarter, but a larger positive impact in the year-to-date period.
Excluding acquisitions and the impact of foreign currency translations, consolidated revenue increased by about $7.9 million, or 6.6%, in the third quarter of 2010. Higher revenue from Licensed Data, Morningstar Direct, and Internet advertising were the main drivers behind the revenue increase. These positive factorsas well as smaller contributions from advisor software and our Investment Management productshelped offset the loss of revenue associated with the Global Analyst Research Settlement (GARS), which ended in July 2009. We had equity research revenue of $1.5 million related to GARS in the third quarter of 2009 and $12.5 million in the first nine months of 2009 that did not recur in 2010.
International revenue continues to increase as a percentage of our consolidated revenue and made up about 28.5% of our consolidated revenue in the third quarter of 2010. Revenue from international operations rose $5.3 million, or 15.5%, to $39.9 million for the third quarter. Acquisitions contributed $3.5 million of additional revenue outside the United States, and foreign currency translations had a slightly negative effect. Excluding acquisitions and the effect of foreign currency translations, non-U.S. revenue rose 6.0%, reflecting stronger product sales in Europe.
Revenue from international operations rose $19.3 million, or 20.7%, to $112.7 million in the first nine months of 2010. Acquisitions contributed $12.7 million of additional revenue outside the United States, and foreign currency translations had a positive effect of $4.2 million. Excluding acquisitions and the impact of foreign currency translations, non-U.S. revenue rose 2.6%.
Higher incentive compensation and employee benefit costs represented approximately one-third of the overall operating expense increase in the quarter. In early 2010, we began phasing in some of the benefits and other compensation-related expense we reduced in 2009. As a result, bonus expense increased $3.6 million in the third quarter and $11.6 million in the first nine months of 2010. Matching contributions to our 401(k) plan in the United States increased $0.9 million in the third quarter and $2.7 million for the year-to-date period because we partially reinstated this employee benefit in 2010. Sales commissions increased $1.4 million in the quarter and $5.9 million in the first nine months of 2010, reflecting improved sales activity compared with the first nine months of 2009 as well as a change to one of our commission plans. In addition, healthcare benefit costs rose $0.5 million in the third quarter of 2010 and $2.1 million in the first nine months of 2010, mainly because of some unusually high medical claims.
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Morningstar Inc. has a market cap of $2.43 billion; its shares were traded at around $49.33 with a P/E ratio of 32.6 and P/S ratio of 5.1. Morningstar Inc. had an annual average earning growth of 24.5% over the past 5 years.MORN is in the portfolios of Ron Baron of Baron Funds, Chuck Royce of Royce& Associates, Kenneth Fisher of Fisher Asset Management, LLC, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
Assets in exchange-traded funds (ETFs) increased to $883 billion as of September 30, 2010, compared with $693 billion as of September 30, 2009, based on data from the ICI.In the third quarter of 2010, our consolidated revenue increased 16.4% to $139.8 million. Revenue for the first nine months of the year rose 13.4% to $404.2 million. We had $12.0 million in incremental revenue from acquisitions during the third quarter, which contributed about 10 percentage points to our consolidated revenue growth. Currency movements had a slight negative effect in the third quarter, but a larger positive impact in the year-to-date period.
Excluding acquisitions and the impact of foreign currency translations, consolidated revenue increased by about $7.9 million, or 6.6%, in the third quarter of 2010. Higher revenue from Licensed Data, Morningstar Direct, and Internet advertising were the main drivers behind the revenue increase. These positive factorsas well as smaller contributions from advisor software and our Investment Management productshelped offset the loss of revenue associated with the Global Analyst Research Settlement (GARS), which ended in July 2009. We had equity research revenue of $1.5 million related to GARS in the third quarter of 2009 and $12.5 million in the first nine months of 2009 that did not recur in 2010.
International revenue continues to increase as a percentage of our consolidated revenue and made up about 28.5% of our consolidated revenue in the third quarter of 2010. Revenue from international operations rose $5.3 million, or 15.5%, to $39.9 million for the third quarter. Acquisitions contributed $3.5 million of additional revenue outside the United States, and foreign currency translations had a slightly negative effect. Excluding acquisitions and the effect of foreign currency translations, non-U.S. revenue rose 6.0%, reflecting stronger product sales in Europe.
Revenue from international operations rose $19.3 million, or 20.7%, to $112.7 million in the first nine months of 2010. Acquisitions contributed $12.7 million of additional revenue outside the United States, and foreign currency translations had a positive effect of $4.2 million. Excluding acquisitions and the impact of foreign currency translations, non-U.S. revenue rose 2.6%.
Higher incentive compensation and employee benefit costs represented approximately one-third of the overall operating expense increase in the quarter. In early 2010, we began phasing in some of the benefits and other compensation-related expense we reduced in 2009. As a result, bonus expense increased $3.6 million in the third quarter and $11.6 million in the first nine months of 2010. Matching contributions to our 401(k) plan in the United States increased $0.9 million in the third quarter and $2.7 million for the year-to-date period because we partially reinstated this employee benefit in 2010. Sales commissions increased $1.4 million in the quarter and $5.9 million in the first nine months of 2010, reflecting improved sales activity compared with the first nine months of 2009 as well as a change to one of our commission plans. In addition, healthcare benefit costs rose $0.5 million in the third quarter of 2010 and $2.1 million in the first nine months of 2010, mainly because of some unusually high medical claims.
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