Moody’s Earned $2.07 per Share

1Q19 revenue of $1.1 billion up 1% from 1Q18
1Q19 diluted EPS of $1.93 up 1%; adjusted diluted EPS of $2.07 up 2% from 1Q181; both aided by a lower effective tax rate
Record 1Q19 Moody’s Analytics revenue of $472.0 million up 16%, with double-digit growth across all business lines
Affirming FY 2019 diluted EPS and adjusted diluted EPS guidance ranges of $7.30 to $7.55 and $7.85 to $8.10, respectively

Moody’s Corporation (MCO) today announced results for the first quarter of 2019, as well as provided its current outlook for full year 2019.

“Moody’s first quarter revenue reflected robust performance in Moody’s Analytics across all business lines. This strength was largely offset by an expected decline in Moody’s Investors Service’s revenue as the business faced challenging year-over-year debt issuance comparisons,” said Raymond McDaniel, President and Chief Executive Officer of Moody’s. “We are affirming our full year 2019 guidance of $7.30 to $7.55 for diluted EPS and $7.85 to $8.10 for adjusted diluted EPS.”

MCO FIRST QUARTER REVENUE UP 1%

Moody’s Corporation reported revenue of $1.1 billion for the three months ended March 31, 2019, up 1% from the prior-year period.

U.S. revenue was $612.1 million, up 2%, and non-U.S. revenue was $530.0 million, approximately flat to the prior-year period. Revenue generated outside the U.S. constituted 46% of total revenue, down from 47% in the prior-year period. Foreign currency translation unfavorably impacted Moody’s revenue by 2%.

Moody’s Investors Service (MIS) First Quarter Revenue Down 7%

Revenue for MIS for the first quarter of 2019 was $670.1 million, down 7% from the prior-year period, compared to a 14% decline in issuance activity2. U.S. revenue was $411.2 million, down 5%, and non-U.S. revenue was $258.9 million, down 10%. Foreign currency translation unfavorably impacted MIS revenue by 2%. The MIS adjusted operating margin was 54.9%.

Corporate finance revenue was $355.4 million, down 9% from the prior-year period. This result was primarily driven by a decline in global bank loan issuance, partially offset by increased U.S. and EMEA investment grade bond activity. U.S. and non-U.S. corporate finance revenues were down 6% and 15%, respectively.

Structured finance revenue was $100.7 million, down 15% from the prior-year period. This result primarily reflected lower U.S. and EMEA collateralized loan obligation (CLO) refinancing activity. U.S. and non-U.S. structured finance revenues were down 16% and 12%, respectively.

Financial institutions revenue was $115.8 million, up 1% from the prior-year period. U.S. financial institutions revenue was down 5%, while non-U.S. revenue was up 6%.

Public, project and infrastructure finance revenue was $92.7 million, down 1% from the prior-year period. This result reflected a slow start to the year in non-U.S. infrastructure finance issuance, principally in EMEA, largely offset by higher U.S. municipal issuance against a low prior-year comparable. U.S. public, project and infrastructure finance revenue was up 13%, while non-U.S. revenue was down 18%.

Moody’s Analytics (MA) First Quarter Revenue Up 16%

Revenue for MA for the first quarter of 2019 was $472.0 million, up 16% from the prior-year period. U.S. revenue was $200.9 million, up 22%, and non-U.S. revenue was $271.1 million, up 12%. Foreign currency translation unfavorably impacted MA revenue by 3%. Organic MA revenue for the first quarter of 2019, which excluded Reis and Omega Performance revenues, was $460.6 million, up 13% from the prior-year period. The MA adjusted operating margin was 28.1%.

Research, data and analytics (RD&A) revenue was $307.7 million, up 15% from the prior-year period. U.S. and non-U.S. RD&A revenues were up 20% and 12%, respectively. Organic RD&A revenue, which excluded Reis revenue, was $298.8 million, up 12%, driven by strong sales growth at Bureau van Dijk in the second half of 2018, as well as sales of credit research and ratings data feeds.

Enterprise risk solutions (ERS) revenue was $121.9 million, up 19% from the prior-year period. This result reflected growth in fourth quarter 2018 and first quarter 2019 subscription sales, and the business continued to successfully execute on the transition toward a software-as-a-service model. U.S. and non-U.S. ERS revenues were up 26% and 15%, respectively.

Professional services revenue was $42.4 million, up 13% from the prior-year period. U.S. and non-U.S. professional services revenues were up 34% and 2%, respectively. Organic professional services revenue, which excluded Omega Performance revenue, was $39.9 million, up 6% from the prior-year period.

Posted by on April 24th, 2019 at 7:19 am


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