Moody’s Q1 Results Top View; Now Sees FY17 Adj. EPS Towards Top End Of Range

Moody’s Corp. (MCO), a credit ratings, research, tools and analysis company, Friday reported significantly higher earnings in its first quarter, benefited by one-time gain and higher revenues. Adjusted earnings and revenues topped market estimates. Looking ahead, for fiscal 2017, the company now anticipates adjusted earnings per share to be toward the upper end of its previous outlook range.

For the first quarter, net income attributable to the company climbed to $345.6 million from $184.4 million last year. Earnings per share were $1.78, 91 percent higher than $0.93 a year ago.

The latest results included a $0.31 per share non-cash, non-taxable gain from a strategic realignment and expansion involving Moody’s China affiliate China Cheng Xin International Credit Rating Co. Ltd.

Excluding the gain, the latest quarter’s adjusted net income was $285.9 million or $1.47 per share.

On average, 12 analysts polled by Thomson Reuters expected earnings of $1.24 per share for the quarter. Analysts’ estimates typically exclude special items.

Operating income climbed 46 percent from last year to $443.4 million.

Moody’s reported revenue of $975.2 million, up 19 percent from $816.1 million last year, a period of weak issuance. Analysts expected revenues of $918.92 million.

U.S. revenue was $577.8 million, up 20 percent, and non-U.S. revenue was $397.4 million, up 18 percent.

Revenue for Moody’s Investors Service was $668.2 million, up 27 percent from last year. Revenue for Moody’s Analytics grew 5 percent.

Raymond McDaniel, President and Chief Executive Officer of Moody’s, said, “Moody’s achieved record revenue in the first quarter as Moody’s Investors Service benefited from strong issuance, especially in the leveraged finance markets, and Moody’s Analytics continued to exhibit steady growth.”

Looking ahead, for fiscal 2017, the company now anticipates earnings per share of $5.46 to $5.61 including a $0.31 per share gain from China affiliate CCXI. Excluding this gain, the company now…

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