Morningstar Inc. saw a per-share profit in 2004 for the first time in five years, according to updated initial public offering documents the investment research firm filed Wednesday with the Securities and Exchange Commission, Dow Jones reports.

Chicago-based Morningstar, whose IPO will be launched via an auction process handled by W.R. Hambrecht, had net income of $8.8 million in 2004, or 21 cents a diluted share, compared to a net loss of $11.9 million, or a loss of 31 cents a share, in 2003. The last time the company produced net income in the last five years was in 2002. In that year, net income stood at $446,000, but stock-based compensation forced its diluted per-share to a loss.

In 2004, revenue climbed 29% to $179.7 million. The company said that strong demand for its products - software and Internet data for individual investors, financial advisers and institutional investors, among others -- across all business segments contributed to revenue growth. It added that growth wasn't the result of price adjustments.

Last year, several Wall Street banks reached settlements with regulators, under which they agreed to pay $450 million over five years to provide independent research to customers. Morningstar's revenue was impacted positively by the need for independent research by more and more firms.

The company did not disclose the amount it raked in for providing independent research in 2004, but said that it had clinched five deals with major Wall Street clients and expected those deals to contribute significantly to revenue within its individual investor business line in the future.

Morningstar also projected its 2005 "walk-in" revenue, or sales that are recurring through subscriptions and licensing agreements, to be $121.7 million, assuming no cancellations. That figure was based on contracts in place as of Jan. 1. The company's walk-in revenue at the beginning of 2004 was $93.1 million.

In the SEC filings, Morningstar revealed that it hasn't set up any reserves for an ongoing SEC investigation related to incorrect total return data that it published in early 2004 on  the $16 million Rock Canyon Top Flight Fund.

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