Citing a slowdown in investing by cautious investors, Chicago-based investment research group Morningstar Inc. reported a slight increase in second quarter profits over last year.
Morningstar reported net income of $27.9 million, or 56 cents per diluted share, for the second quarter of 2012 ended June 30 compared with $26.5 million, or 52 cents per diluted share. in the same quarter in 2011.
Morningstar also reported consolidated operating income of $41.1 million, an increase of 6.6% compared with $38.6 million in the same period a year ago. It also reported consolidated revenue of $166.0 million, a 3.1% increase over $161.0 million in the second quarter of 2011.
For the first six months of 2012, Morningstar reported net income of $48.0 million, or 95 cents per diluted share, compared with $49.0 million, or 96 cents per diluted share, for the same period last year. For the same period, the company reported consolidated operating income of $71.5 million, an increase of 1.6% compared with $70.4 million a year ago. It registered consolidated revenues of $326.7 million, an increase of 4.5% over $312.8 million reported for the first half of 2011.
Joe Mansueto, chairman and chief executive officer of Morningstar, described the company's business in the second quarter as sluggish. "The investment industry continues to face challenges, and our clients remain cautious about spending," he said.
As previously reported, Morningstar's largest investment management client began managing several fund-of-funds portfolios in-house in April, which reduced second-quarter revenue by about $3 million.
In addition the company reported Morningstar.com revenue was lower because of a difficult advertising sales market and declining paid premium subscriptions. "In this environment, we're taking steps to align our cost structure with revenue," Mansueto said.