Although revenue and net income dropped for 2009, Morningstar has begun restoring benefits that were suspended last year as the company ended the year with an upturn in results in the fourth quarter. It had suspended 100-percent matching contributions to employee 401(k) plans, but is now matching 50 percent of the employee money. It also expects to provide some moderate pay increases in 2010 after keeping most compensation flat last year and is filling some vacant job positions.
Net income fell to $14.4 million in the fourth quarter ended December 31, down 4.7 percent from a year earlier. Revenue in the most recently ended period was $122.6 million, up 2.8 percent from $119.3 million. For the year, earnings fell 25.1 percent to $14.4 million, down from $19.3 million in 2008. Revenue declined to $82.3 million, off 10.9 percent from $92.5 million.
Morningstar changed its bonus plan last year and coupled with the slowdown in financial performance, bonus expense decreased by $5 million. The company actually grew headcount to 2,600 employees from 2,375 as it acquired other operations and hiring at its development center in China.
The company cited lower advisor software revenue as the second-largest factor in the revenue decline as Principia subscriptions dropped to 35,844, off by 17 percent, while revenue from the Advisor Workstation was off slightly with licenses falling 2 percent to 148,392. The biggest revenue loss was from investment research as the Global Analyst Research Settlement expired in July. That source had produced $5.8 million in income in the fourth quarter of 2008.
