Summary
Moody's Corporation (MCO) reported solid financial results for the third quarter and the first nine months of 2019, demonstrating robust revenue growth driven by strong performance in both its Moody's Investors Service (MIS) and Moody's Analytics (MA) segments. For the three months ended September 30, 2019, total revenue increased by 15% year-over-year to $1,240.5 million. This growth was fueled by increased corporate debt issuance in MIS, benefiting from low borrowing costs, and continued demand for credit research, data feeds, and risk solutions in MA. Diluted Earnings Per Share (EPS) also saw a significant increase of 25% to $1.99. The company continued its strategic acquisition activities, integrating several new businesses to enhance its offerings in ESG research, climate risk analysis, and risk analytics solutions. Concurrently, Moody's is progressing with the planned divestiture of its MAKS business, expecting the transaction to close in the fourth quarter of 2019. The company also maintained a strong focus on capital allocation, with significant share repurchases completed under its Accelerated Share Repurchase (ASR) program contributing to a reduction in diluted weighted-average shares outstanding and supporting EPS growth.
Financial Highlights
55 data points| Revenue | $1.24B |
| Cost of Revenue | $350.00M |
| Gross Profit | $890.00M |
| SG&A Expenses | $292.00M |
| Operating Expenses | $691.00M |
| Operating Income | $549.00M |
| Net Income | $380.00M |
| EPS (Basic) | $2.01 |
| EPS (Diluted) | $1.99 |
| Shares Outstanding (Basic) | 189.00M |
| Shares Outstanding (Diluted) | 191.10M |
Key Highlights
- 1Total revenue for the third quarter of 2019 increased by 15% to $1,240.5 million, driven by strong performance in both MIS and MA segments.
- 2Diluted EPS grew by 25% to $1.99 for the third quarter of 2019, benefiting from robust operating income and a reduced share count due to share repurchases.
- 3MIS segment revenue increased by 16% to $746.6 million, primarily due to higher corporate debt issuance and favorable market conditions.
- 4MA segment revenue grew by 13% to $493.9 million, supported by strong demand for data products, risk solutions, and contributions from recent acquisitions.
- 5The company completed several strategic acquisitions during the period, including Vigeo Eiris, Four Twenty Seven, and RiskFirst, to expand its service offerings.
- 6Moody's is actively pursuing the divestiture of its MAKS business, with the transaction expected to close in Q4 2019.
- 7Free Cash Flow for the first nine months of 2019 increased by 11% to $1,134.6 million, reflecting strong operating cash generation.