July 2, 2008 / 2:30 PM / 11 years ago

UPDATE 1-MSCI Q2 profit falls; Morgan Stanley to sell stake

(Recasts; adds details, share movement)

July 2 (Reuters) - MSCI Inc MXB.N, which was spun off from Morgan Stanley (MS.N), posted a 6 percent fall in quarterly profit on higher operating expenses, and said the investment bank intends to sell half of its remaining stake in the company, sending the investment analysis firm’s shares down 13 percent.

Morgan Stanley, the second-largest U.S. investment bank, will sell half of the 53 million shares of MSCI that it holds, a stake currently valued at $898 million.

MSCI reported second-quarter net income of $18.6 million, or 18 cents a share, compared with $19.9 million, or 24 cents a share, in the year ago quarter. Analysts expected a profit of 19 cents a share, according to Reuters Estimates.

Operating revenue for the quarter rose 22 percent to $108.2 million and was in line with market estimates.

Revenue was boosted by a rise in revenue related to index and analytics subscriptions and to equity index asset based fees, which were up 21.3 percent and 25.0 percent respectively, the company said in its earnings release.

Second-quarter expenses rose 20 percent to $74.7 million.

MSCI shares were down 6 percent at $31.88 in morning trade on Nasdaq. The touched a low of $29.33 earlier in the session. (Reporting by Sweta Singh in Bangalore; Editing by Amitha Rajan)

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