Moody’s Earned $1.69 for Q3

3Q18 revenue of $1.1 billion up 2% from 3Q17
3Q18 operating income up 4% from 3Q17; adjusted operating income up 3.1%
3Q18 diluted EPS of $1.59 down 2% from 3Q17; adjusted diluted EPS of $1.69, up 11%
FY 2018 diluted EPS guidance range is now $6.95 to $7.10, which includes a $30 million to $40 million restructuring charge expected to be recorded in 4Q18
FY 2018 adjusted diluted EPS guidance range is now $7.50 to $7.65

Moody’s Corporation (MCO) today announced results for the third quarter of 2018, as well as provided its current outlook for full year 2018.

“Moody’s third quarter performance reflected strong growth from Moody’s Analytics, partially offset by a decline at Moody’s Investors Service, as non-financial corporate debt issuance slowed versus the record level in the prior-year period,” said Raymond McDaniel, President and Chief Executive Officer of Moody’s. “We are reducing our outlook for full year diluted EPS to a range of $6.95 to $7.10 and adjusted diluted EPS to a range of $7.50 to $7.65, primarily reflecting our expectation for continued lighter debt issuance into the fourth quarter. In response, we intend to undertake cost management activities, which will result in a fourth quarter restructuring charge of $30 to $40 million and an aggregate charge through the first half of 2019 of $45 to $60 million. We expect this to result in incremental annualized savings of $30 to $40 million going forward.”

THIRD QUARTER HIGHLIGHTS

Moody’s Corporation reported revenue of $1.1 billion for the three months ended September 30, 2018, up 2% from the third quarter of 2017.

Operating expenses totaled $614.0 million, approximately flat to the prior-year period. Operating income was $466.8 million, up 4% from the third quarter of 2017. Adjusted operating income, which excludes depreciation and amortization, as well as non-recurring acquisition and integration expenses associated with the Bureau van Dijk acquisition (“Acquisition-Related Expenses”), was $514.2 million, up 3% from the prior-year period. Operating margin for the third quarter was 43.2% and the adjusted operating margin was 47.6%.

Diluted EPS of $1.59 was down 2% from the third quarter of 2017. Adjusted diluted EPS of $1.69 was up 11%. Third quarter 2018 adjusted diluted EPS excluded $0.10 per share related to the amortization of acquired intangible assets. Third quarter 2017 adjusted diluted EPS primarily excluded a $0.23 per share gain on a foreign currency hedge associated with the Bureau van Dijk acquisition (“Purchase Price Hedge Gain”). Neither third quarter 2018 diluted EPS nor adjusted diluted EPS were impacted by the adoption of accounting standard update ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting,” compared to a $0.04 per share tax benefit in the third quarter of 2017.

Posted by on October 26th, 2018 at 8:11 am


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