Fitch Ratings posted a decline in revenue of 9.1% in dollars during its first fiscal quarter, according to Fimalac S.A., its parent company. Coupled with expectations of slow ABS issuance for the rest of the year, Fimalac said it would lay off about 150, or roughly 7% of its employees by yearend. The company said it would also reduce variable compensation expenses. The rating agency reported revenue of $202.1 million for the company's first fiscal quarter, compared with $222.3 million for the same period a year earlier. The company's first fiscal quarter ran from October to December 2007. Fimalac said the outcome was expected, due to volatility in the credit markets, which led to decelerating issuance activity. Mortgage-backed securities in the U.S. and global CDOs were the sectors whose plummeting revenue and activity suppressed the company's earnings results. "Considering the continuing restricted issuance activity and uncertainty in credit capital markets, based on the information currently available and provided there are no significant change in market conditions, some of Fitch Ratings' businesses are expected to be less buoyant than in the past," according to a company statement. Therefore, said Fimalac, its revenues for the fiscal year ending Sept. 30, 2008 could decline within a range of 10% to 15%, compared with fiscal year 2007. Revenue from corporate finance ratings, comprised of banking, corporate and public finance, continued to grow, according to a company statement. Despite the latest results, Fimalac says it sees opportunities to provide various business services to the financial services industry through Fitch Ratings and the division Fitch Solutions, which was created in January. Also, the company announced last Friday that it would begin to rate paper issued by Canadian ABCP conduits.

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