Summary
Moody's Corporation (MCO) reported its second-quarter 2019 financial results, demonstrating solid revenue growth driven by its Moody's Analytics (MA) segment, which saw a 12% increase in revenue. This growth was partially offset by modest declines in the Moody's Investors Service (MIS) segment. The company incurred significant charges related to restructuring and the planned divestiture of its MAKS business, which impacted reported net income and diluted EPS. However, Adjusted Operating Income and Adjusted Diluted EPS showed resilience, with Adjusted Diluted EPS growing 1% year-over-year. This indicates underlying business strength despite one-time charges. Moody's continues to execute on its capital allocation strategy, including share repurchases, and is focused on investing in growth areas and maintaining liquidity.
Financial Highlights
54 data points| Revenue | $1.21B |
| Cost of Revenue | $340.00M |
| Gross Profit | $874.00M |
| SG&A Expenses | $275.00M |
| Operating Expenses | $731.00M |
| Operating Income | $483.00M |
| Net Income | $310.00M |
| EPS (Basic) | $1.64 |
| EPS (Diluted) | $1.62 |
| Shares Outstanding (Basic) | 189.40M |
| Shares Outstanding (Diluted) | 191.30M |
Key Highlights
- 1Total revenue increased by 3% to $1,213.6 million for the second quarter of 2019 compared to the prior year, primarily driven by strong performance in the Moody's Analytics (MA) segment (+12%).
- 2Moody's Investors Service (MIS) segment revenue saw a modest decline of 2% to $738.4 million, impacted by unfavorable foreign currency rates and lower activity in Structured Finance.
- 3The company recorded a $53.8 million restructuring charge related to its 2018 Restructuring Program and an $8.7 million impairment charge for the planned divestiture of MAKS.
- 4Reported operating income decreased by 9% to $483.5 million due to these charges, but Adjusted Operating Income increased by 2% to $599.0 million.
- 5Diluted EPS declined by 16% to $1.62, largely due to the restructuring and divestiture charges. However, Adjusted Diluted EPS rose by 1% to $2.07.
- 6The company continues its capital return program, with $1.0 billion to $1.3 billion expected in total share repurchases for 2019.
- 7Moody's completed several strategic acquisitions in the ESG and cyber risk data space during the quarter, indicating a focus on expanding its data and analytics capabilities.